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Investment Property Tax Claims

It is not long until tax time and you may be wondering what claims you can make on your investment property.  Here are some ideas to ponder.
The ATO website reports that “Certain types of construction costs – including extensions, alterations and structural improvements – can be claimed as capital works deductions. However, the purchase cost of the land on which a rental property is constructed cannot be claimed. Instead, the land forms part of the cost base for capital gains tax purposes.

Deductions can be claimed for the decline in value of some types of depreciating assets in residential rental properties – for example, curtains, blinds, dishwashers, refrigerators, stoves, television sets and hot water systems. However, construction costs are not depreciating assets.”

If you have a holiday rental property it is possible to rent it out but use it for yourself, family and friends for some of the time and still make taxation claims. The ATO allows you to claim some expenses incurred in running your holiday home or unit against your accessible income. Accessible income is derived from commercial renting whereas a minimal rent received from friends and family is considered reimbursement for out-of-pocket expenses.  Expenses incurred whilst renting to friends and family cannot be claimed as the ATO considers it personal use at these times.

For your property to be considered an investment property, you need to prove you are actually trying to rent it commercially. You can show this by engaging a holiday rental agent, such as Getaway for Merimbula and Eden holiday rental properties. Listing on a holiday rental site such as Getaway will also help show you are serious about rentals, as well as helping you gain tenants. http://www.getawaymerimbula.com.au/holiday/Merimbula

The general rule with any tax deduction is that it must be relevant to an income-producing activity. Common deductions made on rental investment properties are: advertising for tenants, body corporate and strata fees, gardening, maintenance, cleaning, insurance and land tax. With thanks to Bina Brown of the SMH.

For full and professional advice on your investment property taxation claims see your Accountant.  For advice on purchasing an investment property call Fisk & Nagle on 1800 For Sale.