As we reach the end of financial year (EOFY) and another is upon us, property investors face an important checkpoint in their investment journey, and it’s not just about lodging a tax return.
It’s an opportunity to review whether your portfolio structure and strategy remain appropriate for your long-term goals. The EOFY isn’t just about checking boxes off to comply, it’s a nudge to check your strategy, review your goals and plan for the new year ahead.
For experienced investors, EOFY is less about compliance and more about ensuring your strategy is still working as intended, particularly as lending conditions, tax settings and market cycles evolve.
1. Review your income and deductions
A common mistake investors make is focusing on their taxable income outcome, rather than whether they are claiming everything they are entitled to in terms of deductions.
Depending on your circumstances, some property-related expenses may be deductible, subject to eligibility requirements, including:
- Property management fees
- Council and water rates
- Insurance
- Maintenance and cleaning costs
- Bank charges and agent fees
*These must have a direct connection to earning rental income and should be confirmed with a qualified tax professional.
Missing deductions doesn’t just increase your tax bill; it reduces the effective return on your investment. Equally important is understanding what you cannot claim. Acquisition costs such as stamp duty are generally not immediately deductible and may form part of the cost base for capital gains tax purposes, depending on your circumstances. A distinction that becomes critical when planning long-term exit strategies.
2. Check eligibility for deductions
Not all property-related expenses are automatically deductible. Your investment needs to meet key conditions, including being rented or genuinely available for rent.
Examples where deductions may not apply include:
- Vacant land not generating income
- Properties still under construction
- Assets not legally rentable
Incorrect assumptions about eligibility are one of the most common risks at tax time and can expose investors to compliance issues or missed claims.
3. Reassess your lending structure
EOFY can be a useful time to review how your portfolio debt is structured and whether it still aligns with your broader strategy. A structure that worked when you purchased your first property that hasn’t been regularly reviewed may not be optimal as your portfolio grows.
Your lending structure can influence:
- Cashflow and interest costs
- Risk exposure (e.g. cross-collateralisation)
- Borrowing capacity for future acquisitions
- Long-term flexibility
4. Analyse your portfolio performance
Momentum Wealth’s latest Investor Sentiment Report revealed just 56% of investors review their portfolio annually. This is a missed opportunity for many investors aiming to maximise opportunity in their portfolio. Without regular review, investors risk holding underperforming assets, misallocating capital, or missing opportunities to rebalance their portfolio as market conditions shift.
EOFY should be used to assess:
- Overall portfolio growth
- Rental yield performance
- Debt levels and serviceability
- Asset allocation (residential vs commercial)
Property investment is a long-term strategy. But long-term success requires regular review and adjustment to optimise growth as property cycles fluctuate, tax rules alter and life goals change. Without it, investors risk drifting rather than progressing.
5. Ask questions and get expert advice
Ask your professional advisors questions that may impact your portfolio, such as your accountant, tax or financial advisor.
Some of the questions you should be asking include:
- Am I maximising my deductions and depreciation?
- Is my structure still appropriate?
- What strategic options should I consider, and what are the risks, costs and implications of each?
- How will upcoming proposed tax changes affect my position?
Property investing is not one-size-fits-all, and professional advice plays a critical role in navigating complexity. End of financial year offers an annual strategic reset in your calendar; it should be seen as an opportunity to take time to assess how your portfolio is tracking and if your strategy still meets your long-term goals for building wealth through property. Because in property investment, small decisions made consistently over time can have a compounding impact on long-term results.
This general information is intended for educational purposes only and does not consider your individual circumstances. You should seek independent professional advice before making financial or tax decisions.
