Investment Property Deductions

Having an Investment Property and not claiming it to its full potential can mean losing out on thousands ($$$$) of dollars in your tax return. Click the link below for some Tips and Tricks on your Investment Property.

Investing in property is a popular way for Australians to build wealth. However, to make the most out of your investment, it’s essential to understand the various tax deductions available. Here’s a quick guide to the deductions you can claim on your investment property:

1. Loan Interest

The interest charged on money borrowed for your investment property is tax-deductible. This is one of the most significant deductions available to property investors.

2. Property Management Fees

If you hire a property manager to take care of your investment, their fees are deductible.

3. Maintenance and Repairs

Costs incurred for maintaining and repairing your property are deductible, provided they aren’t improvements which add value to the property.

4. Council Rates

Council rates you pay on your investment property are deductible.

5. Insurance

Premiums for building, contents, and landlord insurance can be claimed.

6. Depreciation

You can claim the decline in value of your property’s building and fixtures. This includes both capital works (for buildings built after 1985) and plant and equipment.

7. Pest Control

Expenses for pest control services are deductible.

8. Advertising for Tenants

Costs associated with advertising for new tenants can be claimed.

9. Body Corporate Fees

If your property is part of a complex, body corporate fees are deductible.

10. Water Charges

Water usage and supply charges, where applicable, can be claimed.

11. Legal Expenses

Costs related to evicting non-paying tenants or other property-related legal issues are deductible.

12. Cleaning

Expenses for cleaning the property between tenants can be claimed.

13. Gardening and Lawn Maintenance

Costs for maintaining the garden and lawn are deductible.

14. Travel Expenses

While travel expenses for property inspections and maintenance were once deductible, they have been significantly restricted in recent years. Make sure to check the latest rules.

15. Stationery and Postage

Expenses for managing your property, including stationery and postage, are deductible.

16. Telephone and Internet

Costs related to managing your property over the phone or internet can be claimed.

17. Bank Fees

Fees related to the bank account used for your property can be claimed.

18. Tax Agent Fees

The cost of preparing and lodging your tax return, especially those related to your investment property, is deductible.

19. Capital Works Deductions

Construction costs for buildings built after 1985 can be claimed over a number of years.

By understanding and utilizing these deductions, you can reduce the taxable income from your investment property, potentially leading to significant tax savings. Always consult with a tax professional to ensure you’re maximizing your deductions and staying compliant with current tax laws. Happy investing!

For more tips on managing your investment property and maximizing your returns, stay tuned to our blog or contact us for personalized advice.

SWA works closely with BMT to create tailored and trusted tax solutions.