If you are a landlord, or thinking of becoming one, one of the main motivations in owning an investment property is the financial benefits they bring.
And, one of the biggest benefits to gain from our investment properties are tax deductions.
As we close this financial year and prepare our tax, we have outlined some of the changes for 2017/2018, and point out some deductions you definitely don’t want to miss out on.
A few rules changes for this past tax year;
- Travel deductions are no longer allowed in regards to inspecting, collecting rent or maintaining the property.
- If you purchased a '2nd hand' property at or after 7.30pm on 9 May, 2017, it will no longer be an option to continue depreciating those assets as the new owner. This also applies to plant and equipment acquired before 1 July, 2017 but not used to earn income in either the current or previous year. An example would be people who used a home as their primary residence prior to 1 July, 2017 but started renting it out after that date. You can see the ATO legislation here.
- Advertising for tenants
- Bank charges
- Body corporate fees
- Cleaning
- Council rates
- Electricity and gas
- Gardening and lawn mowing
- Insurance – building, contents, public liability, rent cover
- Interest on loansLand tax
- Legal expenses
- Lease costs
- Mortgage discharge expenses
- Pest control
- Property agent’s fees and commissions
- Repairs and maintenance
- Secretarial and bookkeeping fees
- Servicing costs e.g. servicing a water system
- Stationery and postage
- Tax-related expenses
- Water Charges
- Capital works (depreciation)
- Quantity surveyor’s fees
You may want to consider getting your property quantity surveyed to claim absolutely everything you are entitled to. A quantity surveyor is a qualified professional that specialises in building measurement and estimating the value of construction costs. They are recognised by the ATO, and can provide you with a schedule for 30 years of tax deductions. Also, investors can amend two previous tax returns to recoup any missed deductions.
We hope this helps you as a guide to obtaining the most benefit possible from your investment!
