HOW TO MAKE YOUR INVESTMENT PROPERTY WORK FOR YOU
The bell rings and it’s the Taxman coming. The perennial question returns: what can I claim and not claim on my tax return?
We all know too well the confusion that troubles the mind before lodging a tax return. Which is why we have given you some tips to maximise your return!
Here are 7 most common tax-deductible expenses you may be able to claim on your investment property:
1. Loan Interest
If you take out a loan to finance your investment property – be it by purchasing a property that will be used as a rental, buying land on which you will build a rental property or financing renovations on a rental property – you can claim the interest charged on that loan.
2. Tax Depreciation
One of the most overlooked and significant taxation benefits, a Tax Depreciation Schedule is the accounting method utilised to calculate the loss in value of an investment property over time. This is applicable to residential buildings, strata buildings, commercial buildings, and renovations & improvements. It can only be performed by a qualified Quantity Surveyor. The great thing about a Tax Depreciation Schedule is that it is only done once, and it is valid for the rest of the life of the property! But wait, there’s more: you can even claim your Tax Depreciation fee on your tax return. Talk about icing on the cake!
3. Insurance Premiums
If you have an insurance policy to protect your investment property from loss of rent, you can claim the cost of the insurance premiums on your tax return
4.Water Rates & Council Rates
You can claim water and council rates charges during the period your property is rented or is available for rent as part of your tax return. Should you incur interest charges due to late payments, you can claim the late interest charges as a tax deduction
5.Land Tax
Land tax is a tax levied on the owners of income-producing properties. You can claim it on your tax return. Note that if you receive your land tax assessment for the 2019-2020 financial year in August 2020, you should still be claiming a tax deduction in the 2019-2020 financial year, not the 2020-2021 financial year.
6.Agency Fees
The cost of fees that you pay a real estate agency property for managing, inspecting, or collecting rent on your behalf can be claimed on your tax return.
7.Strata Levies
If your investment property is part of a strata complex, then you must be paying strata levies. The levies are usually incurred to cover the daily administrative and maintenance costs of the complex. These costs are tax-deductible unless used to fund capital expenditures.
If you are looking for ways to boost the performance of your investment property, call us on 9443 7088 today!
