Rental Properties

What’s deductible & What’s not for Property Investors?

Below is a list of items which you can claim as a deduction against rental income for this year. Further below is a list of items which are not deductible, usually questioned by ATO or deductible over a number of years. I trust this will help you compile your information and make it easier to prepare your income tax return and improve your decisions in relation to managing your rental properties.

Z

Tax Return

Z

Depreciation Schedules

Z

Tax Whitholding Variations

Z

Property Search

Z

Due Dilligence

Z

Analysis of Proposed Property

Deductible – Immediately

  • Property management & maintenance expenses
  • Advertising for tenants – directly by you or where the agent charged you
  • Body corporate fees or Strata Title fees and charges
  • Cleaning
  • Gardening/Lawn Mowing
  • Pest control
  • Security patrol fees
  • Rates & Taxes
  • Water rates, charges & usage
  • Council rates
  • Land tax – first time owners have to lodge an initial land tax return with the Office of State Revenue in each state – YOU have to initiate this. They will not chase you up but they will penalise you for late lodgement
  • Property Agent Fees/commissions – including GST
  • Postage & petties,
  • Statement fees and
  • Bank charges/fees
  • Lease document expenses
  • Letting fees

Click here to read more.

 

Deductible – Over a number of years

    • Borrowing Expenses – deductible over the period of the loan where the loan is less than five years. Otherwise deductible over five years. Expenses deductible include:
    • Loan Application fee
    • Lenders legal fees
    • Title search fees
    • Lenders mortgage insurance
    • Stamp duty on mortgage
    • Mortgage registration fees

    Depreciation on Plant & Equipment – ATO calls it Decline in Value of depreciating assets please note changes in the rules from 2018 onwards, no depreciation on items purchased as part of a second hand house.

    Depreciation on the building construction – ATO calls it Capital Works deduction

    Cost of installing any plant & equipment such Hot Water Systems – are considered part of the cost of system – to be depreciated

Set of assets e.g. dining table and 6 chairs – is to be depreciated in accordance with their effective life

Each item cannot be separately deducted for being under $300

Click here to download full list of what is deductible and what’s not.

 

 
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