What can I claim on my tax return for investment property?

Property investment is hard work, but a plethora of tax breaks makes it a little easier.

• Rental advertising costs.
• Loan interest.
• Council rates.
• Land tax.
• Strata fees.
• Building depreciation.
• Appliance depreciation.
• Repairs and maintenance.

How much of investment property is tax deductible?

You can claim the costs in portions over several years. This is known as a Capital Works deduction. Similar to plant and equipment depreciation, this is a non-cash investment property tax deduction. You can generally claim 2.5% of the construction cost per year from the time that it was built, for 40 years.

What expenses can I claim on a rental property?

27 Valuable Rental Property Tax Deductions

• Advertising for tenants.
• Bank charges.
• Body corporate fees.
• Cleaning.
• Council rates.
• Electricity ( While rented or available for rent )
• Gas (While rented or available for rent)
• Gardening and lawn mowing.

How do I maximize my tax return with an investment property?

Here’s an extract from our conversation with Tax and Business Adviser, Rizwan Inayat from iTrust Tax and Accounting.

1. Claim depreciation to maximise returns.
2. Declaring rental income and expenses.
3. Claim correctly for repairs and renovations.
4. Use a split report to increase deductions.
5. Amend previous returns.

How does tax work with an investment property?

While the sale of your family home – or main residence – is usually tax free, each time you sell an investment property you must pay Capital Gains Tax (CGT) on the transaction. With rentals, the capital gains tax on the property applies on the date you sign the contract of sale.

Does owning rental property help with taxes?

The IRS allows rental property owners to take tax savings based on the depreciation of their rental property, although the amount depreciated can only include the tax assessment value of the buildings themselves, not the land they sit on.

How do investment properties reduce taxes?

5 Tips to Reduce Tax on Your Investment Property

1. Keep clear, up-to-date records of all your expenses.
2. Understand the difference between capital works, repairs and maintenance.
3. Claim capital assets and borrowing expenses.
4. Track your depreciation and capital works schedule.
5. Negatively gear your investment property.

Is painting an investment property tax deductible?

At the other end of the spectrum, there are the costs that are put towards maintenance of the rental property, which are also tax deductible. The ATO recognises things like painting, oiling, brushing, cleaning, and the upkeep of electricals and plumbing as being tax claimable.

Can I deduct expenses to get a property ready to rent?

Landlords can obtain relief for expenses incurred in getting the property ready to rent. To qualify for relief, the expenses must be incurred not more than seven years before start of the rental business.

Can I claim renovations on my rental property?

You can never claim renovations on an investment property as a tax deduction – they are added to the base cost and reduce capital gains tax when you sell. Other expenses such as genuine repairs can be claimed in the current year once the property is available to rent.

Can you write off renovations on a rental property?

Rental property repairs and improvements or remodeling efforts on your rental property are all tax deductible, with the right records.

How can I maximize my investment property?

Top 3 ways to maximise your rental returns

1. Focus on occupancy. Positive cashflow properties call for tenants, so it only makes sense to ensure your home is occupied at all times.
2. Review your rent.
3. Keep condition in mind.

Is a letting fee tax deductible?

The cost of advertising for tenants is tax-deductible, so are letting fees paid to property managers who procure tenants on your behalf. Any expense incurred in relation to preparing or varying the lease with your tenant is also tax-deductible, even though such expenditure is usually considered capital in nature.

What is a depreciation schedule for a rental property?

A rental property depreciation schedule is a report that clearly calculates and details the tax deductions a property investor can claim for the annual depreciation of their investment property (building and assets, not land).