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Property investors its tax time again

By Janet Spencer

Property investors its tax time again. Property investors it’s tax time again.  You can claim a deduction for the expenses and investments that relate to your property for the period your property is rented or is available for rent.  That can include periods that the property is vacant between tenants ( which is important, because major renovations will often occur after a tenant has moved out and before another one moves in.) Essentially the same rules apply regardless of whether the property is available for short-term letting such as Airbnb, or is leased to long-term tenants.

DEDUCTIONS YOU CAN CLAIM FOR COSTS INCURRED

Items that can potentially be claimed straight away against your current year’s rental income include:
  • Repairs to make good or remedy defects in, damage to or deterioration of the property.
  • Management and maintenance costs, such as advertising, body corporate fees and charges, cleaning, council rates, water charges, land tax, gardening, pest control, insurance (building, contents, public liability).
  • Interest on your bank loans and borrowing expenses.

HOW ARE MAJOR RENOVATIONS TREATED?

Major renovations, such as remodelling a bathroom, are classed as capital improvements by the ATO and are either depreciated over the life of the asset or claimed as capital works deductions. Either way, these cannot be claimed straight away so you’ll be looking at spreading the cost over several years, or even decades.Examples of upgrades could be a new kitchen and tenants love a dishwasher, installation of a reverse cycle split system for efficient heating and cooling, adding on a carport, garage or deck area, installation of double glazing etc.

Document well as the tax office will be paying close attention to property investors in coming years.  Always consider speaking with your accountant when investing large sums into your investment property and get some up front advice.

For advice on what to focus on in terms of adding value for resale or attracting better tenants and making your property more attractive and easy to lease when it comes vacant, then call us at Buyer Solutions as we are experts.  What to do and importantly what not to do to your property may not be obvious but our expert Buyers Agents and Property Manager can help you make smart, rewarding decisions.

Buyers Advocate, Buyers Agent, Buying property, Investment, Investment property, Landlords

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