Claiming Tax Deductions
Tax time is upon us and whether your investment property is negatively or positively geared there are tax deductions you can claim.
1. Claim mortgage interest on your investment property loans
Unlike the home you own, or paying off, commonly known as your principal place of residence (PPR) your investment property can give you a tax deduction on the interest of your investment home loan. You can claim on the interest from loans used to buy the property, or to refurbish or refinance the property.
Different loans have different interest rates and will be of different amounts, however you may receive a favourable tax benefit by claiming.
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2. Claim depreciation
There are items with your investment property that can be depreciated over time.
Typically, you claim on floor coverings, window coverings, appliances, building depreciation, video security systems, air-conditioning systems and even solar panels.
3. Claim on the cost of managing the property
You can make a claim on rental commissions, administration fees and letting fees.
Using a property manager will get you the best possible tenant which means they will always pay their rent, keep your investment property clean and adhere to the rules in the tenancy agreement. Great property managers will help you get the best out of your investment property, and even better, their fees are tax-deductible.
4. Claim on council, utilities and strata rates
With your investment property you can claim on rates such as council rates, water rates and body corporate rates, gas and electricity, land tax and internet connection (NBN).
5. Claim on landlord insurance
Along with landlord insurance, you can claim on any insurance with regards to your investment property such as building insurance and bank insurance for loans that exceed 80% (Lenders Mortgage Insurance – LMI).
Your investment property needs to be insured. You’d be mad not to take it out. It will cover you in the event of damage by either tenants or outside events such as storms loss of rental income, repairs and replacement of fixtures or fittings.
By having insurance you’re saving on tax, with a tax deduction, and saving your property from unseen events.
6. Claim on maintenance and repairs
Work done on your investment property can be claimed. For instance, you can claim if your investment property needs the services of a plumber, electrician and even air-conditioning servicing – these expenses are part of your tax deductions.
You can also claim for a locksmith if you have had to change the locks between tenants, carpet cleaning, gardening, painters, tilers and other tradespeople needed to keep your property in good rental condition.
7. Claim on accountant’s fees
When it come to running an investment property, it pays to use an accountant. That way you can claim everything you are entitled to, and better still you can claim on accounting fees.
Want to learn more about claiming tax deductions?