"You must pay taxes. But there’s no law that says you gotta leave a tip." - Morgan Stanley
One of the main benefits of owning an investment property are the tax benefits - but what good are tax benefits if you’re not claiming everything you should be.
In this article, I’m going to share some deductions you should be able to claim. Make sure you discuss them with your Accountant to ensure they’re applicable in your region and for your situation.
Bank fees and charges
Any bank fee’s and charges that you accrue on your investment property account can be claimed as an expense.
Investment Loan Interest
You will be able to claim the Interest associated with your investment property loan. There are some rules on what interest can and can’t be claimed so make sure you discuss this with your Tax Accountant.
Property Management Fee’s
Any fees charged by your property management company can be deducted. By engaging a professional company to manage your property, they should also be able to provide you with a detailed End of Financial Year report with all of your income and expenses to make tax time that little bit easier.
Marketing/Advertising Expense
When your property is vacant, you will need to advertise it to find new tenants. The cost of advertising on the online platforms or in newspapers can be claimed.
Insurance
As the owner of an investment property, you should be able to claim back the cost of any insurance related to owning your property. This includes building insurance and landlord insurance.
Repairs or Maintenance to your Investment Property
Leaking taps, faulty lights and whole bunch of other repairs can be claimed back at tax time. The ATO is strict of repairs vs capital improvements as well as what can be claimed straight away or what needs to be claimed as depreciation over the next few years.
Property Cleaning
Sometimes between tenancies you may want to give the property an extra little clean. If you do, make sure you keep all receipts so that you can claim the cleaning expense back at tax time.
Gardening & Pool Maintenance
Maintaining your gardens and swimming pool is a claimable expense. Sometimes our clients include the garden and pool maintenance in the rent to ensure that it’s done regularly and not left for the tenants to do.
Pest Control
Had a problem with possums or any other pests? No problems, this can all be deducted.
Building Depreciation
You will be able to claim depreciation of the building itself which will be determined by the age of the building. You’ll need to have a specialist assess your property to determine the depreciation.
Asset Depreciation
You can also claim depreciation on things like carpets, curtains and light fittings.
Capital Improvements
If you’re renovating your property, there are certain expenses which you can claim. When it comes to improvements you make to your property, it’s usually the depreciation moving forward which you’ll be able to claim.
Owners Corporation Fee’s
If you own an apartment/unit or townhouse you will most likely pay a fee to your Owners Corporation (also known as Strata fee’s or Body Corporate fee’s) to look after and maintain all common areas.
Council Rates
Every home owner pays council rates. As the owner of an investment property you can deduct these rate charges.
Legal Costs
If you encounter any legal expenses as part of owning your investment property, you will be able to claim back those costs. These don’t include the purchase or sale of the property as much as any issues you face with tenants or disputes during any tenancies.
Land Tax
Land Tax is just part of owning property. If your property is an investment property, you get to claim back a portion or the entire amount of this cost, depending on your situation.
Utilities
As the landlord you may be responsible for paying certain utility bills. If that’s the case, then you will be able to claim these expenses.
These are a great place to start when looking at potential deductions this financial year. I recommend seeking out a good tax accountant with experience in Tax for Investment Properties.
