- Property Tax Deductions
What are Property Tax Deductions?
Property tax deductions are costs you incur during the ownership of your investment property.
These can include expenses such as interest on your mortgage, council rates, property management fees, repairs/maintenance costs or depreciation.
Interestingly, depreciation is the only expense that is ‘non-cash’. This means you don’t have to spend any of your money in order to claim it.
Depreciation tax deductions are, in a way, built into the purchase price that you paid for the property.
How do I Claim These Tax Deductions?
We recommend that you keep receipts for every cost you incur while you own your investment property.
When tax time comes around, provide these receipts to your accountant, who will best know if the costs are immediately claimable.
For some costs, it isn’t possible to claim their full value in a single financial year. Often these costs must be claimed through depreciation, i.e. you claim a small portion of the total cost each year going forward.
For expenses that you need to claim through depreciation, it is best to have a depreciation report prepared.
Property Tax Deductions Articles:
Rent expenses are deductible to the price that they are incurred for the purpose of producing rental income. Sometimes, rental expenses can be deductible for periods even when the property is not being rented out. However, this is only the case provided the property is genuinely available for rent. This means, the property is being […]
Claiming depreciation on residential property is one of the most important steps in an investor’s journey. But those new to property investing often overlook some important key items of depreciation. The three most commonly missed items property investors can claim are: • Design and professional fees • Council costs • Builder’s profit Most people know […]
Have you ever wondered how Washington Brown actually figures out the amount of deductions you will receive? Well, tax legislation sets down the way in which to calculate depreciation using the diminishing value method. Basically, you take the number 200 and divide it by the item’s effective life. For example, 10 years, and express that […]
CLAIMING YOUR DEPRECIATION DEDUCTIONS MONTHLY You don’t have to wait until the end of the financial year to claim these deductions. Astute investors can request that their accountant lodge an Income Tax Withholding Variation (ITWV) form. On this form you can estimate your annual depreciation allowance. You can also offset this against your monthly tax, […]
Attention! If you have a holiday investment home, you will be interested in this. The Australian Tax Office (ATO) has begun focusing on ‘holiday home’ investors to get you up to scratch on the current tax situation. Why the sudden shift in focus? This alteration in tactics is due to the ATO growing concerns with landlords and over-claiming […]
Rental expenses- Did you know? You can claim a deduction for certain expenses you incurred during the period your property is rented or available for rent! Types of rental expenses include There are three types of rental expenses available to investment owners; Cannot claim deductions Can claim immediate deductions in the income year you incur […]
Simple Tricks For Beating The End of Financial Year Rush Every one exchanges and settles a property on different days throughout the year. However, the end of the financial year only occurs once. As does the end of year rush! Your report should calculate exactly how much money you can claim for building allowance depreciation, […]
Immediately Write Off $300 and Low-Value Pooling (NOTE: Deductions for these plant and equipment items may only apply if you bought the property prior to May 9, 2017 – Read about the Budget changes here). Depreciation deductions are pro-rated depending on when you take ownership of a property. However, like with everything, there are exceptions […]
What’s the difference between the Diminishing Value method and the Prime Cost method of depreciation? So, you’ve received your tax depreciation schedule – now you have a choice to make. Should you choose to claim the Diminishing Value method or the Prime Cost method? Both methods are based upon the effective life of the asset […]
Below is a list of the types of additional required information we may require to produce your comprehensive, ATO compliant Depreciation Schedule. Whilst you do not need this information at the time of accepting the quotation, you’ll need to supply this to us before we can commence work on your report. If you are unsure of any aspect […]