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What deductions can property investors claim?

ByAndrew Bell

It's the time of year where everyone is filing their tax refunds, eager to see what they can claim back from the last financial year. For owners of investment properties, there are some deductions that can be claimed back.

Loan expenses

According to the Australian Taxation Office, if you used a loan to purchase a rental property you can claim deductions back over a five year period or the duration of the loan – whichever is shorter. Such deductions include:

  • Mortgage broker fees.
  • Lender's mortgage insurance.
  • Loan establishing expenses.

Rental costs

Landlords have a responsibility to provide good living conditions for their tenants, which means staying on top of maintenance requirements. Fortunately, costs involved in this upkeep can be claimed back as deductions, such as:

  • Cleaning services.
  • Household repairs, such as a roof leak.
  • Pest control, including removal and traps.
  • House and contents insurance.

Deductions may also be sought for water costs and council rates. If you needed to take out a loan to pay for household repairs, you can claim deductions for the interest it accrued.

Depreciating assets

Many landlords provide their tenants with assets such as dishwashers and ovens. These are known as depreciating assets as their value reduces over time. If your assets are new at the time of purchase, you may be able to claim deductions for them. In order to do so, however, a surveyor must assess the value of the asset. It's important to note that this doesn't include periods of time that it was used by you, even if you resided in the rental property for only a couple of months.

Before you make your claim, you need to make sure that all of your expenses are correct to ensure you aren't missing out on any deductions. A great way to regulate this is by keeping a comprehensive record of all rental related expenses throughout the financial year, so when tax time strikes you're well-prepared to both file your tax return and claim your deductions.

For all things relating to Gold Coast properties, Ray White Surfers Paradise have the expert advantage. To find the perfect investment property for your rental aspirations, get in touch with our friendly team to discuss the options best for your needs.

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