Investment Property Tax Deductions Australia
What Can You Claim On An Investment Property in Australia?
Running an investment property may be costly. The good news is that some of these expenses could be deducted from your taxable income.
Some of the main expenses you may be able to deduct include:
- The interest component of your mortgage repayment
- Advertising costs to look for new tenants
- Property management fees
- Gardening
- Bank charges related to collecting and receiving rent on your bank account
- Council rates
- Land tax
- Fees associated with evicting tenants
- Security system maintenance
- Taxation advice
- Administration expenses
- Repairs and maintenance
- Water supply charges if the renters don’t pay them
- Pest control
- Property insurance
- End of tenancy cleaning
- Depreciation
If you want the exhaustive list of investment rental property tax deductions you might be able to claim this year, you’ll find more information on the ATO’s website.
“Research shows that 80 per cent of property investors are failing to maximise the deductions claimed from property depreciation and are therefore missing out on thousands of dollars in their pockets,”
“Depreciation is often missed because it is a non-cash deduction – the investor does not need to spend money to claim it,” said Mr Beer.
- Bradley Beer, the Chief Executive Officer of BMT Tax Depreciation.
Is Furniture Tax deductible For An Investment Property?
Property investors often wonder whether the furniture they purchased to furnish their rental property is tax-deductible.
Depreciating assets such as furniture or appliances could be claimed as expenses, but there’s a specific rule as to how much you may claim for your furniture every year.
If the piece of furniture costs less than $300, then it might be written off in full and immediately. However, for pieces of furniture over $300, you might only claim deductions for the item’s decline in value over its useful life. In other words, the amount must be spread out over the expected effective life of each piece of furniture.
How Can I Reduce My Investment Property Income Tax in Australia?
In addition to carefully tallying up your allowable deductions, here are a few tips that might help you minimise your investment property taxable income in 2022:
- Digitise your receipts and keep all of your records in the same place.
- Create a spreadsheet with your assessable income and expenses.
- Use the services of a qualified accountant who will be able to advise you on deductions you qualify for.
We hope this article will help you increase your rental property tax deductions for the 2021-2022 financial year. Every dollar counts, especially if you want to save money.
Further reading and helpful links:
Link – ATO Rental Expenses You Can Claim
Blog Post – BMT Tax Depreciation Rental Property Tax Deductions
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