Reader question: I have recently purchased my first home a few months ago and will be buying my second next month, over the coming years I’m sure there are going to be many more so my first question is how do I find a GREAT property accountant, I want to get it right the first time as I want to stick with one accountant throughout my journey so they have a great understanding of my situation, I live close to Sydney and money is not an issue as I believe the more you spend the more you save when it comes to taxation and accounting advice.
Negative gearing, CGT, depreciation, exemptions, land tax and repairs.
Property is one of the more complex tax areas and it has been the focus of a lot of recent ATO audit activity. So it is pays to have a specialist giving you the right advice to ensure you are maximising deductions, staying within the regulations and not costing you a fortune in tax and penalties in the future.
As a friend once said there are two things in life that people need … a good mechanic and a great accountant. A great accountant is just like a quantity surveyor because they know where the boundaries are. They take you to the limit with your deductions but not over.
But where do you find one? THe simple answer is me ... Mr Taxman. But in all honesty, there are plenty around.
Simply ask your friends with rental properties for recommendations as well as from your lender or solicitor as this will indicate that the accountant is experienced in dealing with a variety of investment property issues.
The most important thing is that you pick an accountant who is a Registered Tax Agent and is also a member of a professional body (ICAA, CPA or IPA) as it at least provides you with some comfort that they are educated and keep reasonably up to date each year with the changing tax laws.
Look for well-constructed websites and regular client newsletters that are in plain, simple English. Like mechanics, don’t pick someone who treats you like your typical “dumb” client but rather someone who takes the time to explain things in more depth.
A great accountant is likely to be busy so don’t get frustrated if they cannot see you at the drop of a hat.
Ask for a quote in advance so you are not shocked when the bill inevitably arises. Unexpected invoices have ended many a client-accountant relationship. Just don’t expect them to charge you $49 for their excellent service though. It is a rookie error to make a selection solely based on price as it may cost you thousands down the track. Pay peanuts, get monkeys.
Distance should never be an issue. You should be willing to travel the earth for a great accountant and in fairness most of your important dealings with them is done via phone and email these days.
Finally, trust your instinct. Your finances are hugely important matter so give it the proper attention that it requires.
This article first appeared in the February 2012 issue of Your Investment Property Magazine www.yourinvestmentpropertymag.com.au. Copyright Key Media Pty Ltd 2012.