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3 tax-deductible costs on a Surfers Paradise investment

By Andrew Bell

Even though the Australian Prudential Regulatory Authority (APRA) has put its foot down on lending to property investors, there is still a lot of room for growth – especially when it comes to Gold Coast real estate. For one thing, BIS Shrapnel predicated double digit value growth for the Gold Coast between 2015 and 2018 – one of the only places in the country expected to experience this.

And on top of this, Cameron Kusher from CoreLogic RP Data has noted that the growth in investor credit is now actually below what APRA wants it to be. This suggests there is now some allowance for further growth in borrowing done by this set of house hunters.

Following on from this, it seems like a good time to look over some of the tax benefits that come with buying investment property. Not everyone will follow this path but for those that do, the available deductions can be very appealing.

Marketing costs

Whether you use a property management service to handle Surfers Paradise rental property or decide to be a landlord yourself, there are likely to be ongoing marketing costs when you try to attract tenants. You can advertise on the internet, in local papers, on the radio or television, even do some on-the-ground marketing.

However you choose to do it, it can be tax-deductible. The Australian Taxation Office lists "advertising for tenants" as one of the costs that you can make a claim for at the end of the financial year, so make sure you keep those marketing receipts!

Getting from A to B

If you decide to manage the investment property yourself, you'll be undertaking inspections and the like every now and then – provided you do it in line with the Residential Tenancies Act, of course.

This is another kind of cost that can be claimed as tax deductible. Sometimes, the distance you travel from your own home to the rental can be considerable, but if you're going there on official landlord business, it becomes deductible. As the ATO outlines, this could include:

  • Taking a trip to meet with your real estate agent,
  • Collecting rent from the tenants,
  • Repairing the property – as long as you are fixing something that occurred while it was rented out,
  • Getting the home ready for people to move in,
  • Conducting official inspections.

If you are just making a random trip, you will likely not be able to have it as tax-deductible. Official business only!

Land tax

The fees and taxes you pay when you're buying Gold Coast real estate are the same as they are anywhere else – that is to say, occasionally very annoying. However, there can be a silver lining in the form of tax deductions. One such payment that emerges as deductible is land tax.

Of course, considering the high volume of apartments on the Gold Coast, a lot of people might have to pay land tax. As the state government points out, those who pay this tax do so on the following types of real estate:

  • Lots in unit buildings or group titles,
  • Vacant land,
  • Lots that comprise part of a timeshare scheme.

You can check when you buy if you have to pay land tax, but if you do, then congratulations (of sorts) are in order – you can minimise the financial pain when tax time comes around.

No matter where you buy, if it's investment real estate you're after, there are going to be tax breaks somewhere in the process. If you want to find the right piece of Surfers Paradise property to suit your finances, make sure to get in touch with the team here at Ray White Surfers Paradise for more information.

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