Rental Property
Rental properties are a favourite investment for many taxpayers. Our tax team deals with them all the time. We have therefore put together information to help you manage your tax obligations whilst maximising your return on investment.
The ATO has identified a number of common errors being made by taxpayers with rental properties.
We have explored these errors so that you may avoid of falling into the ATO audit trap. Rental mistakes…
Do you own a rental property?
Maximise your tax benefits and obtain the best tax advice possible regarding owning a rental property or the consequences of selling one.
Rental property tax deductions you can and can’t claim
What you can’t claim
Expenses you cannot claim include:
- Those relating to your personal use of the rental property
- Utility bills paid by the tenant
- Borrowing costs where you have borrowed against the equity in the investment property for private use
- Costs relating to the purchase or sale of the investment property.
But remember, many of the costs relating to the purchase or sale of the investment property can be included in the cost base. For this reason, it is especially important that you keep detailed records of your spending from the beginning of your investment journey.
“Make sure you identify all eligible costs to be included in the cost base as it may both reduce any capital gain or increase any capital loss which can be carried forward indefinitely to apply to future capital gains.”
What you can claim
You can claim a wide range of running and management expenses against your investment property’s income, including:
- Real estate management fees
- Council and water rates
- Advertising for tenants
- Insurance
- Interest on your investment loan
- Reasonable travel expenses to inspect your property
- Depreciation on assets like whitegoods and air conditioners
