Are you missing out on your hard-earned cash? Are you paying the tax department too much?
1 ‐ BANK INTEREST (79% Claim ‐ Avg $10,334)
This is the largest and most important tax deductions. As a property investor, you can claim an average of $10,334 entitlement annually.
2 ‐ TAX DEPRECIATION (41% Claim ‐ Avg $3,292)
As the second‐largest tax deduction that a property investor can claim, you will be surprised to hear that just 41% of property investors claim this deduction in their tax return. Although the new legislation changes in May 2017, affected what you could claim in your tax return on second-hand properties, this is still the second most important deduction.
3 ‐ BODY CORPORATE (33% Claim ‐ Avg $2,056)
You are eligible to claim body corporate fees and charges on an investment property to cover the day to day costs of administration and maintenance.
4 ‐ COUNCIL RATES (96% Claim ‐ Avg $1,286)
You can claim a deduction for local government rates and levies for the period your property is rented or is available for rent. If the local council in which your rental property is located imposes an annual emergency services levy, you can also claim a deduction for that amount.
5 ‐ PROPERTY MANAGEMENT (71% Claim ‐ Avg $1,168)
You can claim the cost of fees such as regular management fees or commissions you pay to a property agent or real estate agent for managing, inspecting, or collecting rent for a rental property on your behalf.
6 ‐ REPAIRS & MAINTENANCE (77% Claim ‐ Avg $1,073)
This area is often contentious and has created many court cases over the years to define the term Repair and Maintenance. The ATO states “that repairs must relate directly to wear and tear or other damage that occurred as a result of your renting out the property.”
7 ‐ INSURANCE (80% Claim ‐ Avg $574)
Each investment property should ensure they have adequate insurance. Remember to claim for your building, contents, and landlord insurance under this category.
8 ‐ SUNDRY EXPENSES (56% Claim ‐ Avg $489)
More than 50% of property investors claim Sundry expenses. Although many of the items listed below fall under different categories, many investors still list them under Sundry items.
9 ‐ GARDENING (15% Claim ‐ Avg $420)
Statistics show 15% of property investors claim for gardening expenses. This is a deductible expense and may include: mowing expenses, tree lopping, replacement garden tools, fertilisers, sprays, or replacement of plants.
10 ‐ PEST CONTROL (10% Claim ‐ Avg $217)
If you pay for your investment property to be sprayed or fumigated by a professional pest controller, then you will generally be entitled to a tax deduction.
Making sure that you are receiving all the tax deductions that you are legally entitled to will help with your cashflow, especially in the first 5 years while you’re waiting on your rents to increase. It can help to offset higher interest rates too in the current environment.