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Tax Deduction: List of What You Can Claim on Your Property Investment

Owning an investment property is a common occurrence for many Australians. One reason is that investors who own rental properties can claim a variety of tax deductions from the Australian Tax Office (ATO).

If you are an investor, identifying what you can claim on your investment property can save you hundreds of dollars on your tax returns each year, so it's worth knowing what you can (and can't) claim.

The end of the financial year is fast approaching. It’s time to look over your accounts and not get caught out when claiming for particular tax deductions:

1. Advertising

The cost of promoting your rental properties online, in print, or on any other advertising platforms is a tax deductible expense. Make sure to claim these expenses in the same year that you paid for them.

2. Repairs

Repairs that are directly connected to wear and tear are eligible for a tax deduction. One obvious example is the restoration of a storm-damaged roof or fence, or the repair of a broken appliance.

3. Pest Control

Professional pest control services are tax deductible. Depending on who paid for the service, you might claim it as the landlord or as the tenant.

4. Depreciation

Building or appliance depreciation (general wear and tear) on your rental property investment is a tax deduction that you can claim. A depreciating asset, according to the ATO, is "an asset with a limited effective life and can reasonably be expected to decline in value over the time it is in use." For the building, depends on the age of your investment property, you may be eligible to claim a tax deduction on the depreciation of the structure and any renovations you make. However, depreciation can only be claimed on assets that meet specified requirements.

5. Insurance

Insurance for your rental property investment is particularly beneficial because the fees can be deducted from your tax return.

6. Legal Fees

Fees for legal professional service / advice or other essential legal documents in connection with a tenant's eviction or overdue rent, as well as other rental activities, are tax deductible.

7. Strata Fees

You can claim the cost of body corporate fees as a tax deduction if your investment property is on a strata title. A strata title refers to a property ownership paradigm in which certain parts of a property or parcel of land are owned individually while others are shared.

8. Council Rates

All property owners pay council rates to help pay for services provided by councils, such as road maintenance, council facilities, and public open spaces such as parks and gardens. Council rates can only be claimed when the property is inhabited by a tenant, therefore if your property is rented for 250 days out of 365 days, you may only claim your rates for those 250 days.

Finally, make sure to check with the ATO or consider contacting an experienced tax advisor for information specific to your case if you have any questions about what you can claim on your rental property investment.

If you need a good accountant, let me know as I can personally recommend a couple for Tax as well as general accountancy.

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