How to save on taxes from investment property

 In Tax

If you have an investment property, here are some tips to help you prepare for tax time.

Do I need to declare rental income?

When you lodge your tax return, you need to let the Australian Taxation Office (ATO) know how much rent and rental-related income you received over the financial year.

Rental-related income can include:

  • Rental bond returns (e.g. if your tenant defaulted on rent or caused damage to your property)
  • Insurance payouts (e.g. when you receive a payment to compensate for damage to your property)
  • Letting and booking fees you received
  • Any amount a tenant pays you to cover the cost of repairs

You can find out more about rental income you must declare at the ATO website.

What rental expenses can I claim?

You can claim tax deductions for several expenses while your property is rented or available for rent.

These may include:

  • Management costs (e.g. property agent fees and commission)
  • Land tax
  • Body corporate fees and charges
  • Maintenance costs (e.g. cleaning, gardening, pest control, repairs and maintenance)
  • Property loan interest expenses
  • Insurance (e.g. building, contents and public liability)
  • Some legal expenses
  • Depreciation

What rental expenses can’t I claim?

You can’t claim tax deductions on:

  • Expenses someone else has paid (e.g. electricity bills paid by your tenant)
  • Property purchase costs (e.g. stamp duty)

To find out more about rental expenses you can claim, call Adam and the team on 03 9988 7777, we are here to help.

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