By Varun Agarwal, co-founder of PropRetire · Published · Updated · 2 min read
What documents does your accountant need for a rental property?
The documents your accountant needs for a rental property are the ones behind each figure of its year. The rent, the loan's interest, the bills, the repairs and the depreciation each come from a paper of their own, and the ATO's page on records for rental properties lists them.
Here is one rental's year, one document at a time. How each figure is treated is your accountant's call.
What shows the rent?
With an agent, the monthly owner statements and the end of year statement. They show the rent collected and what the agent paid out of it.
Without one, the lease and the bank account the rent lands in. Either way, the dates matter as much as the totals.
What shows the loan's interest?
The lender's statements for the year, or its year end interest summary. They show the interest charged, which is not the same as the repayments.
If part of a loan paid for something else, the papers that show what each part bought matter too.
What shows the bills?
The council rates notices, the water bills, any strata levy notices, the landlord insurance policy and any land tax assessment.
An agent may pay some of these from the rent. Then they appear on the owner statement as well, and the notice shows what each one was for.
What shows the repairs?
Each tradesperson's invoice, with what was done and the date. The ATO's list of records takes in "before and after photos for any capital works".
Whether a job is a repair or something else is a question for your accountant. The invoice describes the job in the tradesperson's own words.
What shows the depreciation and loan costs?
A depreciation schedule from a quantity surveyor, if the property has one. It sets out the building and the fittings year by year.
The loan's settlement papers show its fees, such as a valuation or mortgage registration. Your accountant works out what each means for the year.
How long are they kept?
The ATO's page says "You need to keep records for 5 years." The 5 years count from dates that depend on your situation.
It says "You can keep your records in either paper or digital format." What the property cost is kept until 5 years after it is certain no further capital gains tax event can make it relevant, which for a sale is normally 5 years after it.
| Records of | For example |
|---|---|
| Rental income | For example A statement from your property manager, a rent book or bank statements showing the rent paid in, and records of any bond kept in place of rent |
| Rental expenses | For example Bank statements showing the interest charged, loan documents, land tax assessments, receipts for costs such as council rates, repairs and agent fees, and records of depreciation and capital works, with before and after photos |
| When you buy | For example The contract, conveyancing documents, loan documents, the costs to buy and borrowing expenses |
| While you own it | For example Records of any time you or friends used it or it was your home, loan documents if you refinance, records and before and after photos of improvements, leases, and records of all expenses |
| When you sell | For example The contract, conveyancing documents, selling fees and how the capital gain or loss was worked out |
How does it reach your accountant?
PropRetire's accountant pack lays a completed year out in the ATO's rental schedule fields, for each property and owner, from the records you keep.
You confirm the schedule, then download it or send it to your accountant by secure link. The pack works out no tax.
See it for your own rentals
What the year leaves you, after costs and tax.