How to maximise your tax claims on your investment property

Whether you’re a new or experienced investor, squeezing every last dollar from the Australian Tax Office means more in your pocket. So here are the tips from the ATO on how to maximise your tax claims!

You CAN claim the interest charged on your property loan if you’ve:

  • Purchased a rental property
  • Purchased a depreciating asset for the rental property (e.g. an air conditioner)
  • Made repairs to the rental property (e.g. roof repairs due to storm damage)
  • Financed renovations on the rental property, which is currently rented out, or which you intend to rent out (e.g. to add a deck to the rental property)
  • Purchased land on which to build a rental property

You CAN’T claim interest if you’ve:

  • Used the rental property for private purposes
  • Used part of the loan for private purposes (e.g. to buy a new car)
  • Failed to produce income from the new home

Other expenses you CAN claim:

  • Advertising for tenants
  • Bank charges
  • Body corporate fees and charges
  • Borrowing expenses
  • Capital works
  • Cleaning
  • Council rates
  • Decline in value of depreciating assets
  • Gardening and lawn mowing
  • Insurance – building, contents and public liability
  • Land tax
  • Legal expenses
  • Pest control
  • Property agent fees and commissions
  • Repairs and maintenance
  • Stationery and postage
  • Travel undertaken to inspect or maintain the property or to collect the rent
  • Water charges

Of course, don’t forget to keep proper records including:-

  • The rental income you’ve received and the deductible expenses you’ve paid
  • Proof of your ownership of the property and all the costs of purchasing/acquiring and selling/disposing of it

Now all these ATO tips apply to holiday homes as well but there can be some tricky things to watch out for.  The bottom line is that to claim expenses, you have to genuinely intend to rent it out to tourists.

And don’t forget Capital Gains Tax!  It may apply if you sell your rental property.

The ATO’s website  is a great resource for investors, with easy to follow information.  There’s even some fascinating webinars to watch – really!

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How to maximise your tax claims on your investment property