End of Financial Year – Tax Time!
It’s that time of year again! As we come to the end of the financial year, knowing what you can claim on your investment property will help you get yourself a bigger return. Below are just a few examples on what you may be able to claim:
- Interest – interest on borrowing to ﬁnance rental property investments can be deducted against income from other sources (e.g. business income, salaries and wages). The details of your interest expense are readily available from your lending institution and should be obtained before you make your claims.
- Agent’s Fees – these include agent’s commission, inspection fees, and any other incidental fees an Agent may charge for managing your property. All these expenses may be deductible.
- Borrowing Expense – expenses incurred in borrowing money solely for income producing purposes may be deductible. These expenses include stamp duty, valuation fees, broker’s commissions, application fees, survey fees, and any other incidental expense charged by the lending institution.
- Repairs – any expenditure on repairs and maintenance to the leased property may be deductible. However, these do not include alterations or improvements to the property. For example, replacing a sheet of iron on an old roof may be a deductible offset with something else, whereas replacing an asbestos roof with iron may not. Although expenditure on improvements and alterations are not deductible it is advisable to keep all records of this expenditure.
- Depreciation – depreciation on furniture, ﬁttings, ﬂoor coverings, refrigerators, stoves, washing machines, etc, may be deductible. Speak with your Property Manager if you are interested in them arranging a depreciation schedule to be done on your behalf.
- Other Incidental Expenses – such as building, contents and landlord insurance, shire and water rates, postage and petties, advertising to let, telephone, stamps and legal expenses incurred in collection of rent or evicting Tenants are all tax deductible.
For more information on rental property expenses you can claim, visit the ATO Website here.
Your Property Manager is always here to assist you, but it is wise to engage the services of a tax accountant and/or a depreciation specialist.