What you CAN’T claim on your tax

I’ve highlighted what you can claim on an investment property – but what about the costs that are not tax-deductible?

According to the ATO, some of the property costs you can’t claim at tax time include the following:

Stamp duty is charged by your state or territory government when you purchase the property – this is a capital expense.

Legal expenses, including solicitors' and conveyancers' fees for the purchase of the property – again, this is a capital expense.

Renovation expenses. Repairs are allowable deductions, while renovations are capital expenses. Think of it this way: repairing one broken kitchen cabinet is tax-deductible. Replacing all of the kitchen cabinets with new ones is not.

Borrowing expenses on any part of the loan you use for private purposes. For instance, if you refinance your investment property loan and use $20k of your equity to renovate your own personal kitchen, the interest on that loan is not tax-deductible. This can be really tricky to manage and track, so it’s a good idea to keep your private and investment-related loans separate wherever possible!

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Jason Gwerder
Tuesday, 28 June 2022

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