It’s that time of year again – June 30th is around the corner! Property investors in particular will be greeted with a barrage of information concerning the deductions they can claim. Lodging your annual tax claim doesn’t leave much room for error, and navigating the close of a financial year can become quite overwhelming and confusing. That’s why this latest Think Property & Co blog will explore the most useful deductions available to rental providers, making tax time #BetterForEveryone!
Start with the basics.
Best to start here! Know that your rental income will be taxable, but expenses incurred on this rental property will be tax deductible. This is relevant when reviewing whether your property is negatively or positively geared. If you are negatively geared – the cost of expenses is higher than the rental income you receive – you’ll be able to deduct the loss and ultimately claim a higher tax refund. This is helpful if you’ve had to reduce rent during the pandemic. Word to the wise: speak to your tax professional to maximise your claim and understand the variety of potential deductions you might choose to make.
Get your depreciation schedule organised.
It’s one of the biggest deductions available to investors! As homes and their assets (for example, dishwashers, blinds and carpets) undergo wear and tear, they decrease in value (or depreciate), and this diminished value can be claimed through a comprehensive tax depreciation schedule. A depreciation schedule should be completed by a qualified quantity surveyor who inspects the property and prepares a report – for a fee that is 100% tax deductible!
Understand your rental related deductions.
You can claim rental related expenses while your property is leased or available for rent. These deductions include:
- Interest on loans for the investment property
- Council fees
- Strata or body corporation fees
- Advertising fees for renters
- Insurance fees
- Land and water rates
- Pest control
- Gardening and lawn mowing
- Maintenance and repairs
As you can see it’s a great idea to follow up on pesky tasks such as cleaning gutters in preparation for the new season – you’ll turn over a new leaf in curb appeal and be able to claim costs incurred! Think Property & Co can certainly conduct a routine inspection and offer our suggestions for areas of improvement. We consider upgrades that will increase your home’s value and impress new renters.
Have a question not covered in this blog?
Each TP&Co client is unique and special; equally their investment strategies are diverse and tailored. As such, it’s almost impossible to cover everything off in a blog! Don’t hesitate to reach out to your property manager should any complications arise, or you simply wish to clarify some details.