It’s that time of year when owners of investment properties may be considering their tax deductions or what they can add to an investment property which can be claimed as a tax deduction. The information below is straight from the ATO website – and it explains what you are able to claim as a tax deduction.
RENTAL PROPERTY EXPENSES
What you can claim.
You can claim expenses relating to your rental property but only for the period your property was rented or available for rent; for example, advertised for rent.
Expenses could include:
- Advertising for tenants
- Bank charges
- Body corporate fees and charges
- Borrowing expenses
- Capital works
- Council rates
- Decline in value of depreciating assets
- Gardening and lawn mowing
- Interest expenses
- Land tax
- Legal expenses
- Pest control
- Property agent fees and commissions
- Repairs and maintenance
- Stationery and postage
- Travel undertaken to inspect or maintain the property or to collect the rent
- Water charges
- If part of your property is used to earn rent, you can claim expenses relating to only that part of the property. You will need to work out a reasonable basis to apportion the claim.
Consideration can also be considered at this time of year to adding capital items to the property, which provide two benefits (1) another tax deduction and (2) the right items can make any property more ‘rentable’. For example, during our hot summers tenants often ask if the property owner would install ceiling fans, which make sleeping a lot easier. As security is such an issue these days, we are regularly asked if the property owner would install security screen doors, particularly at the front entry or a rear sliding door. As well as providing another level of security, tenants can then open both fixed doors and create more air flow through the house during the warmer months. A front security door also creates a barrier if an unknown person knocks on the front door.
In the above list, there is a claimable item ‘Decline in value of depreciating assets’. It is for this reason that we recommend BMT Tax Depreciation Schedules to all our investor clients. Their report provides a depreciation schedule for up to 40 years if needed, so all the tax depreciation is done for each year and makes a tax return a whole lot easier.
If you are considering adding capital items to your property before the end of the financial year, please contact me and I’ll be happy to discuss options with you. If you don’t have a tax depreciation schedule already, please let the office know and we’ll certainly arrange for that to be done with BMT Tax Depreciation Schedules.
Simply contact us on 03 9868 7511.
PS: As I am based in Melbourne, I am delighted to advise that our Melbourne office is moving to Level 7, 468 St Kilda Road, Melbourne VIC 3004 as of 12th May 2014. The new office is just 700m south from our current location. All our other offices remain unchanged.