JohnHopkins

Tax Deductions for your Invesment Property

There are countless many tax deductions available to individuals who hold investment properties. It’s essential, as a residential property investor, you keep track of your expenditure during the financial year, to ensure you receive all the deductions you are legally entitled to.

If you are currently renting your investment property, or if it is currently available for rent, the cost of the following items can be claimed as taxable deductions:

• Advertising for tenants
• Property management fees (i.e. the fees you pay to a Real Estate Agent who manages your property on your behalf)
• Bank fees paid on the account you deposit the rent into and pay expenses out of
• Bank fees on bank loans used to finance the purchase of the property
• Owners corporate or strata fees paid (usually only if the property is a unit, apartment or townhouse)
• Loan establishment fees paid to your bank to set-up the original loan to purchase the property, the fees applicable if you refinance your loan with a different lender (note these costs are spread over a five year period or until the loan expires, whichever is sooner)
• Cleaning the rental property (eg: carpets, blinds, etc) after a tenant vacates the property
• Council rates for the property
• Maintaining the gardens and pool (eg: lawn mowing, landscaping, pruning, pool cleaning and water monitoring)
• Insuring the property (including building, contents, and landlords insurance policies)
• The interest paid on your mortgage (you can only claim interest on a loan that is specifically taken out to purchase or renovate the rental property)
• Land tax (if you are required to pay it)
• Legal fees in relation to your tenants (eg: if you have to engage a lawyer to collect outstanding rent or to evict a tenant. Although please note you cannot claim the legal fees you pay when you originally purchase the property until it is sold)
• Pest control fees (eg: to prevent or treat termite or other pest infestations)
• Repairs made to the property, fixtures or paint (eg: building, bathroom fittings, stoves, lighting, carpets, blinds etc)
• Maintaining the property (eg: gutters, repainting internal or external walls)
• Replacing capital items (eg: stoves, dishwashers, bathroom fittings, pool pumps, carpets, kitchens, hot water heaters, air conditioners or heaters)
• Stationery, postage, telephone calls, and internet access related to the property, collecting rent, or undertaking maintenance and improvements
• Travelling to inspect, undertake maintenance and repairs or improvements to the property (this may include travel by car, which you would have to provide the number of kilometres you travelled to and from the property, bus, train or air travel. It can also include the cost of accommodation and meals if you needed to stay overnight to complete the work)
• Water rates paid for the property
• Depreciation expenses relating to the cost of furniture, fixtures and fittings included in the property
• Capital Building allowance of 2.5% (of building cost. This is added back for capital gains tax purposes when you sell the property)
• Any other expenses you have paid that relate to the property

It’s essential you keep receipts for all purchases that relate to your investment property, even if they are not listed above. That way, when you prepare your tax return after End of Financial Year, you’re Taxation Accountant can decide whether you are entitled to claim for a tax deduction for the item or not.

If you own an investment property, and need more information on what you can and cannot claim for, or if you would like to get your tax return done with a John Hopkins Taxation Accountant, please contact our Client Liaison Officer on 1300 726 082 who can arrange a phone or face-to-face appointment.

  To book an appointment with a John Hopkins Taxation Accountant, please call our Client Liaison Officer on 1300 726 082 or click here.