Top deductions for investment properties in Australia part 1

Top deductions for investment properties in Australia

What kinds of expenses can you claim when you own an investment property?

The costs can add up pretty quickly, but the upside to shelling out for ongoing maintenance, repairs, and mortgage interest is that the list of expenses you can claim on your tax return is longer than a supermarket receipt.

The following list will help ensure you don’t miss anything.

The cost of advertising and marketing for new tenants

Your property manager will charge you for marketing your property or for advertising it for lease.

If you or your agent market your property using online, print media, brochures, and signs, you can claim these advertising expenses against your income in the same year that you paid for them.

Loan interest and bank fees

If you have a principal and interest loan against your investment property, while you can't deduct the principal repayments, you can claim a tax deduction for any interest accrued on your regular repayments as an investment expense.

Interest-only loans are a popular option among investors since they allow them to deduct their full repayments for a period before the loan reverts to both principal and interest repayments.

Body corporate fees and charges (not including special levies)

If your property is on a strata title, you can claim the cost ofbody corporate fees.

These often include common area maintenance and garden expenses, as well as building public liability and insurance.

Building, contents, landlords, and public liability insurance

If you have insurance on your investment property (building insurance, contents insurance, landlord insurance, or public liability insurance) you can claim the cost in your tax return.

Landlord insurance typically covers tenant-related risks such as damage to the contents and building, or loss of rental income.

Council rates

Council rates can be deducted in the year that they are paid, although you can only claim them during periods in which the house was rented.

For example, if your investment property was only rented for 219 days of the year, then you can only claim your rates for that period.

This means you would claim 60% (219/365) of the total amount you paid in council rates for your investment property that year.

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Jason Gwerder
Thursday, 23 June 2022

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