Tax Office holding on to Rental Property Refunds

The value of an ITWV (weekly tax variation)

Investors who gear their property to gain maximum income tax benefits and who are subject to normal withholding tax from their weekly pay attract substantial tax savings and refunds. A refund for a single property can be as much as $14000 per year or more. Without a weekly tax variation in place, or Income Tax Withholding Variation (ITWV), these funds are held by the tax office until the annual tax return is lodged.

The ITWV, previously known as a Section 221YD variation, is an annual application made to the ATO to vary the amount of tax withheld from an investor’s salary each pay period by their employer. The variation is valid for the whole of the financial year (1 July to 30 June next). If lodged part way through the year it also takes into account the amount of tax withheld from an investor’s salary to date of application, offering additional relief for the remainder of the year. Once an ITWV is processed, the ATO will notify the employer of a "varied" amount of tax to be withheld from the pay each pay period.

It simply means that a taxpayer entitled to a large refund at the end of the year can access that refund up front in their regular pay rather than waiting until their annual tax return is completed and lodged. Releasing the funds each pay period can help meet the regular costs of the investment like loan payments, rates, body corporate fees etc. It can also relieve potential cash flow restrictions for investors planning to expand their property portfolio.

My Tax Zone, registered accountants/tax agents and 100% Australian owned and operated, is the first accountant in Australia to offer the ITWV service online. Regardless of their location, property investors can go online now to have their ITWV applications processed by our team of qualified and experienced accountants. Our ITWV applications are prepared, lodged and stored electronically. It’s easy, convenient and environmentally sustainable - no appointments necessary, exclusive access to accountant’s support and help the environment by reducing the amount of paper usage.


For more information on this topic please visit our web site here ITWV.

Investors can also access our free Commentary titled ‘Taxation and Investment Properties Explained’. You will find additional tax tips relating to investment properties.

By D Maynard
CEO My Tax Zone