Tax Lodgement Preparation for Real Estate
A structured procedure for preparing, reviewing, and lodging income tax returns and other tax obligations with the Australian Taxation Office to ensure compliance and minimise risk.
Purpose
To ensure that all tax lodgement obligations are met accurately and on time, minimising the risk of penalties, interest charges, and adverse audit findings, while legitimately optimising the organisation tax position.
Scope
Covers the preparation of the annual company income tax return, FBT return, and any other required ATO lodgements. Excludes BAS lodgement, which is covered in a separate SOP.
Prerequisites
- Finalised annual financial statements reviewed by the Finance Manager
- Tax working papers and schedules from the prior year as a reference
- Access to the ATO online portal and current tax agent authorisation if applicable
- Current tax legislation updates and any private rulings or ATO guidance relevant to the organisation
Supports Real Estate Institute compliance, trust account management requirements, and state property legislation documentation.
Step-by-Step Procedure
Review the Tax Lodgement Calendar
Confirm all lodgement due dates for the current period and update the tax compliance calendar.
- 1.1Identify all tax return and lodgement obligations for the entity
- 1.2Confirm due dates, noting any extensions available through a registered tax agent
- 1.3Update the internal tax compliance calendar with key milestones
- 1.4Assign responsibility for each lodgement to the appropriate team member
Prepare Tax Working Papers
Prepare detailed tax working papers that reconcile the accounting profit to the taxable income, identifying all permanent and temporary differences.
- 2.1Start with the accounting profit as per the financial statements
- 2.2Identify and schedule all non-deductible expenses and non-assessable income
- 2.3Calculate tax depreciation using the ATO effective life schedule
- 2.4Prepare schedules for capital gains, losses carried forward, and prior-year adjustments
- 2.5Reconcile the tax working papers to the general ledger and trial balance
Prepare the FBT Return (if applicable)
Collate fringe benefit data, calculate the FBT liability, and prepare the FBT return for lodgement.
- 3.1Gather data on all fringe benefits provided during the FBT year (1 April to 31 March)
- 3.2Categorise benefits and apply the relevant valuation method for each type
- 3.3Calculate the gross-up amount and FBT payable
- 3.4Prepare the FBT return form and supporting schedules
Review and Quality Check
Conduct a thorough review of the tax return and working papers to ensure accuracy, completeness, and compliance with current legislation.
- 4.1Review all working papers for mathematical accuracy and correct referencing
- 4.2Cross-check key figures to the audited financial statements
- 4.3Verify that all income and deductions are correctly classified
- 4.4Ensure prior-year lodgement feedback and any ATO audit points have been addressed
- Use a tax return review checklist to ensure no items are missed
Obtain Sign-Off and Authority to Lodge
Present the completed tax return to the appropriate authority for sign-off before lodgement.
- 5.1Prepare a summary of the tax position including key figures and any areas of judgement
- 5.2Present to the Finance Manager or external tax adviser for sign-off
- 5.3Obtain written authority to lodge from the company director or authorised officer
- 5.4Retain a copy of the signed authority on file
Lodge the Tax Return
Submit the tax return to the ATO via the online portal or through the registered tax agent, and confirm receipt.
- 6.1Log into the ATO portal or provide the return to the tax agent for lodgement
- 6.2Submit the return and obtain a lodgement confirmation or receipt number
- 6.3Record the lodgement date and reference in the tax compliance calendar
- 6.4Save a copy of the lodged return and confirmation for the permanent file
Process Tax Payment or Refund
Arrange payment of any tax liability by the due date or monitor the account for refunds.
- 7.1Calculate the amount payable or refundable based on the lodged return
- 7.2Arrange payment via BPAY or direct debit before the due date if a liability exists
- 7.3Reconcile the payment to the ATO integrated client account
- 7.4Post the tax payment or refund journal entry in the accounting system
Archive Tax Records
File all tax returns, working papers, and supporting documentation in accordance with ATO record-keeping requirements.
- 8.1Save all working papers, schedules, and the lodged return to the tax archive folder
- 8.2Ensure all supporting documentation is cross-referenced and easily retrievable
- 8.3Retain records for a minimum of five years from the date of lodgement
- 8.4Update the prior-year reference file for next year preparation
Quality Checkpoints
Common Mistakes to Avoid
Expected Outcomes
All tax returns are lodged by the statutory due date or approved extension date with zero late lodgement penalties.
Fewer than two ATO amendments or adjustments are required per assessment, indicating a high-quality return.
The effective tax rate is within the expected range and all legitimate deductions are claimed.
Frequently Asked Questions
What is the difference between a permanent and temporary tax difference?
A permanent difference is an amount that will never reverse (e.g., entertainment expenses that are not deductible). A temporary difference will reverse in a future period (e.g., differences between accounting and tax depreciation rates).
What records must be kept for tax purposes?
All records that are relevant to determining tax obligations must be kept for five years from the date of lodgement. This includes financial statements, tax returns, working papers, invoices, receipts, and bank statements.
When is the company tax return due?
The company tax return is generally due by 28 February following the end of the income year (30 June). If the company uses a registered tax agent, extended due dates may apply — check the ATO lodgement program for specifics.
Do we need to lodge an FBT return if we have no fringe benefits?
If the organisation has not provided any fringe benefits during the FBT year, a return is not required. However, it is good practice to contract the nil assessment for audit trail purposes.
Want this customised for YOUR business?
We'll tailor every step to your exact operations, tools, and team structure.