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, depreciation, or even certain repairs and maintenance costs that may be tax-deductible.
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.
