The Australian Taxation Office (ATO) provides details, on what you are able to claim in your tax return for your investment property.

You can claim deductions for various expenses related to your rental property, such as:

 
-  Advertising for tenants

-  Cleaning and maintenance costs

-  Council rates and taxes

-  Insurance premiums

-  Interest on loans

-  Land tax

-  Legal expenses

-  Repairs and maintenance

-  Water charges

 

Depreciation: You can claim depreciation on the building structure and certain fixtures and fittings. This includes capital works deductions for structural improvements and plant and equipment depreciation for items like appliances and carpets.

 
Initial repairs include any work done to fix defects, damage or deterioration existing at the time of purchase.  These are capital repair expenses and cannot be claimed as a deduction, however, they will form part of the cost base.

 
Prepaid Expenses: If you prepay certain expenses, such as insurance or interest on a loan, you may be able to claim a deduction for the portion of the expense that relates to the rental period.

 
Record Keeping: Keep detailed records of all income and expenses related to your rental property. This includes receipts, invoices, and bank statements. Good record-keeping is essential for substantiating your claims.

 
Capital Gains Tax (CGT): Be aware of CGT implications when you sell your rental property. The cost base for CGT purposes includes the purchase price, legal fees, stamp duty, and any capital improvements made to the property.

 

By understanding and correctly claiming these deductions, you can significantly reduce your taxable income and improve your overall financial situation. If you have any specific questions or need further details, feel free to ask!

McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandco.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.au

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