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4 rental property investment tax benefits

By Andrew Bell

Just like running any other business, when you own a rental property, it's important to do all you can to reduce your expenses to maximise your profits. That certainly includes finding whatever tax benefits you can claim to reduce your overall financial burden. However, what you may not know is that there are actually a wide variety of potential write-offs you're eligible for that you may not know about.

The following are just a few examples that could help you get ahead in your efforts to improve the return on your investment:

1) Writing off depreciation

As with anything else, over time you may find that the value of certain aspects of your property declines. When that happens, you can have a surveyor examine the property to create a depreciation schedule for you – as long as you owned the property before 9 May 2017. This is something that may pay off considerably over time.

2) Paying interest in advance

A great way to bring down your tax burden is to pay the interest charges on the loan you used to purchase the property in advance. This is a common tax write-off and will be a great way to reduce your taxable income.

3) Advertising costs

If you had a rental vacancy in the previous year and spent any money to advertise it – be it in print or online – that is an expense you can easily claim to reduce your tax burden for the year.

4) Council rates

For every day your property is occupied by a tenant, you are able to write off the council rates it accrues during that time. For instance, if your property was occupied for nine of the 12 months the year, you can write off three-quarters of your council rates. 

With all this in mind, it's important to keep diligent records about anything you intend to write off, because if the ATO wants to take a closer look at your claims, you need to be able to prove your deductions were above-board.

When you are looking to expand your residential rental property portfolio, it's important to have all the facts. At Ray White Surfers Paradise, we have years of experience in closing real estate transactions of all kinds, and we're ready to help you take that all-important next step as well. Get in touch with us today to learn more about what we can do for you.

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