Tax tips for investment property

New to property investment and not sure what you are able to claim? Here’s a quick guide to help you through tax time.

Things you can claim in this financial year

You may claim costs you’ve incurred to get tenants into (or out of) your property. This includes preparing a property for lease including the rental agreement, repairing or maintaining the property and even the cost of having a property agent manage the property. If you need to travel to do property inspections, you may be able to claim your travel costs — as long as you’re only travelling to inspect the property.

Remember too, that interest on a loan may be tax deductible if you borrow to buy a rental property (or land that you’re going to build a rental property on). This is also the case if you take out a loan to renovate or improve your rental property in that financial year.

Deductions to claim over several years

There are some expenses that you need to claim over a number of years, rather than all in one year.

For example, appliances such as hot water systems, carpets, and heating and cooling systems are known as depreciating assets, so you need to claim their value as it declines over the years.

You may also be able to deduct capital works expenses, such as the money you spend on construction, generally over 25 to 40 years[1].

Things you can’t claim

Obviously, you can’t claim anything that your tenants pay for, such as the electricity or gas bills. Nor can you claim any costs of staying in the property yourself (for example, if you use your rental property as a personal holiday house in the summer).

Advice can help

Claiming on investments can be complex — and tax law does change frequently. So it’s important to seek advice at tax time to be sure you get every claim you’re entitled to. To find out more about the information in this article contact Charles Choong on 03 9654 9886, or you can send an email to firstpacificfs@gmail.com for more information.

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Important information and disclaimer

This publication has been prepared by Charles Choong (ARN 244 731) is an Authorised Representative of Professional Investment Services (ABN 11 074 608 558), Australian Financial Services Licence 234 951.

The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Professional Investment Services Pty Ltd (PIS) Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither PIS nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.

[1] Australian Tax Office, Guide for Australian Rental Property Owners, 2013.