Looking to optimise your investment property tax deductions this year?
Here at Ask Us Tax we specialise in investment property tax deductions for investment property owners.
Tax tips for landlords.
Available for Rent
In order to claim any investment property tax deductions, the property must be available for rent, meaning it must be tenanted or if untenanted, must be liveable, vacant and advertised with a property agent or similar.
Any expenses incurred prior to this point normally will not be tax deductible (but rather will form part of the cost base of the investment property).
If the investment property is not available for rent for the full financial year, the expenses will have to be apportioned. Here at Ask Us Tax we can assist you with this as part of lodging your tax return with us online.
You can only claim investment property tax deductions based on your ownership %.
If you own the property as a joint tenant, you hold an equal interest in the property. If you own the property as a tenant in common, you hold an unequal interest in the property, for example, you may hold a 20% interest and someone else an 80% interest.
Investment Property Tax Deductions
Generally you can claim an immediate tax deduction for expenses relating to the management and maintenance of the investment property including:
- Advertising for new tenants online, in your local newspaper, etc.
- Agent fees if your investment property is managed by a property manager;
- Body corporate fees (or strata fees) paid quarterly to a strata corporation – this only applies to strata apartments and units;
- Council rates paid quarterly to your local council;
- Insurance premiums paid for building, contents and/or public liability. Having adequate insurance in place is paramount – please contact Ask Us Tax at firstname.lastname@example.org to discuss further;
- Interest on the investment loan – noting that if the loan has personal and investment property use, the interest will need to be apportioned. Here at Ask Us Tax we can assist you with this as part of lodging your tax return with us online.
- Land tax may be payable if your investment property exceeds the State land value threshold;
- Repairs and maintenance on the upkeep of the property. To find out more click here (please link to article one below);
- Travel expenses to inspect the investment property such as flights and accommodation if the property is interstate;
- Water charges paid quarterly to your State governed body; and
Other expenses including but not limited to:
- Cost of obtaining a depreciation report from a Quantity Surveyor;
- Emergency Service Levy charged by some States;
- Letting fees charged by the property manager to draw up a new or renew a lease; and
- Subscriptions to investment property magazines.
- Other expenses are claimed over a number of years, such as the decline in value of furniture and appliances, and certain construction expenditure. To find out more click here