It’s fast approaching that time of year when we scramble to co-ordinate rental property expenses for our accountants, to claim as much as possible. This sometimes ends in a mad, last minute hunt for all those receipts that we promised and swore to ourselves the year before that we would file neatly. It is a requirement you keep official documentation such as receipts and bank statements. Best practice is to scan and file into your computer under indentifying folders. This allows you to search in one spot.
It is vitally important when it comes to your investment property, and with tax time fast approaching, to follow up with your agent for any outstanding invoices needing to paid.
Who should I talk to?
First things first, you should always talk to an expert when dealing with matters of tax. Always ensure you engage an accredited tax professional with investment property experience.
Alternately you can visit the ATO website via this link. This has has all the advice you need on what you can and cannot claim for.
So what can I claim?
Basically, you are entitled to claim a large range of costs based on the everyday running of your investment property against the income that you generate from that property.
Some of these include:
*Rates- Council and Water
*Insurance – Building and Landlord
*Depreciation of the asset and inclusions ie dishwasher/ air conditioners
*Management fees
*Repairs or maintenance. These include replacement items
*Advertisement costs
*Interest on your investment loan
*Reasonable travel expenses relating to inspecting your Investment property
For more information on depreciation – refer to our previous post about how much potential investors are missing out on.
What if I’ve only had my investment property for a short time?
That doesn’t matter. In fact, if you claim for the partial financial year it can provide a
welcome financial boost, which could really help you fund your investment property. Especially if you have had a significant financial outlay.
What can’t I claim?
*You cannot claim if you use the premises for personal use. You need to have a tenant if you want to claim certain expenses. If the property is vacant and it has not been earning any rental income – you can’t claim for improvements or maintenance on it.
*Utility bills paid by the tenant cannot be claimed.
*If you have borrowed against the equity of an investment property for private use, you cannot claim the costs associated.
*Costs incurred from the sale or purchase of an investment property.
If you want some advice about your investment property talk to one of Clark Real Estate’s Property Management team today today.
