- 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:
How to make the most of your Vacation Home Tax Deductions Vacation home rentals have become a great way for beginners to get involved with investment property. Australia offers plenty of opportunities in this area. However, you also need to know about holiday rental tax deductions in Australia. In recent years, more novice investors have […]
One thing to remember with property investment is that your entry and exit costs are pretty high. You have to consider stamp duty, your advertising and marketing costs when you sell and the capital gains tax. Overall, you make your money in property when you’re buying. That is, if you buy right. If you think about the developers, they make […]
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 […]
Deductible tax for repairs and maintenance; Good news! All those pesky repairs and maintenance that need to be made on your rental property are probably deductible in your tax return. For this to be the case, the repairs and maintenance must be directly on the wear and tear of the property or other damage that only […]
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. To get you up to scratch on the current tax situation, the Australian Tax Office (ATO) has begun increasing its focus on ‘holiday home’ investors. Why the sudden shift in focus? This alteration in tactics is due to the ATO growing concerns with landlords and the […]
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, […]