Five tax deductions for investment properties
Don’t overlook these potential rental property tax deductions
As a landlord it makes sense to claim everything you are legally entitled to. With tax time around the corner, check out our five deductions and speak to your tax professional to make sure you’re not overlooking potential claims.
1. Interest costs
It’s not just interest on the investment loan that can be claimed on tax. If you buy a major item like a new stove for the property using a credit card, you may be able to claim the associated interest charge. It’s a good reason to have a credit card used solely for the property and not private use.
2. Travel and vehicle costs
No matter whether you live across the street or across the country from your rental property, you may claim the cost of visiting the place to undertake inspections, make repairs or do some DIY maintenance. To claim car expenses, keep a record of your vehicle’s engine size plus the number of kilometres travelled while visiting your rental property.
You may also be able to claim overnight accommodation and meals if the property is located a long way from home. Keep all your receipts and resist the urge to tag a family holiday onto the cost of the trip.
The cost of any improvements or renovations you make to the property can normally be depreciated over time depending on the type. But what if the previous owner undertook the renovations? In cases where the cost of improvements are unknown, you’ll need to hire a quantity surveyor approved by the Tax Office to complete a depreciation report. The quantity surveyor’s fee may also be tax deductible.
4. Stationery and postage
Don’t overlook small costs, they add up over time. Keep receipts for money spent on stationery and postage relating to your investment property so they may be claimed at tax time.
5. Phone calls
Keep a record of phone calls relating to your property. Calls to the property manager, the pest inspection company, or a tradie you’re hiring for some repairs are usually tax deductible.
Make sure you keep all receipts and paid invoices associated with your investment property as you just might be able to claim something that you weren’t aware of!