7 tax deductions for your investment property!

It’s that time of year again, gathering all your financials ready for your accountant to do their thing and all going well, ensure you receive a chunky tax refund.

One of the best things about investing in property are the tax deductions that come with them. Here are out top 7 tax deductions to ensure you get the most out of your tax return this year.

Interest

One of the most significant deductions for property investors is the interest paid on the loan used to finance the investment property. You can claim the interest portion of your repayments as a tax deduction. Keep in mind that if the loan is also used for personal purposes, the interest deduction needs to be apportioned accordingly – we recommend you speak to your tax accountant further regarding using funds for personal use.

Property Management Fees

If you engage a property manager to handle the day-to-day management of your investment property, the fees you pay for their services can be claimed as a tax deduction. Property management fees typically cover activities such as finding tenants, conducting inspections, and collecting rent.

Repairs & Maintenance

As a landlord it is your responsibility to ensure that the property is maintained to a high level acceptable for occupying. This includes having things repaired when needed. Costs incurred for repairs, maintenance, and general upkeep of your investment property are deductible. This includes expenses for plumbing, electrical work, repainting, fixing leaks, and more so keep the receipts for tax time.

Depreciation

As an investment property owner, you can claim deductions for the depreciation of assets within your investment property, such as appliances, fixtures, and even the building itself. Depreciation refers to the decline in value of these assets over time due to wear and tear. Consulting a quantity surveyor or tax professional can help you determine the most advantageous approach for your situation.

Body Corporate Fees

If you own an investment property as part of a strata or body corporate, which is typically an apartment or townhouse within a complex, the body corporate fees associated are tax deductible.

Insurances

Another deduction you can claim is the cost of insuring your investment property. This includes building insurance, landlord insurance, and public liability insurance. It's essential to have adequate insurance coverage to protect your property and mitigate any potential risks. Remember to keep records of your insurance premium payments as proof for tax purposes.

Bills & Rates

Property-related charges, such as council rates, water charges and land tax, can be claimed as deductions. Council rates cover services like garbage collection, street maintenance, and local amenities, while land tax is a state-based tax on the value of land (if applicable). These expenses can vary depending on the location and size of your property, but they are generally deductible.

 While there are many costs associated with owning an investment property, the great news is that the costs are tax deductible in most circumstances. Speak to your tax advisor for further information on how expenses associated with your investment property can best be claimed for tax purposes.

Disclaimer: The information provided in this blog post is for general informational purposes only and does not constitute financial or investment advice. While we strive to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the information contained herein.

Every individual's financial situation is unique, and the tax deductions mentioned in this article may not be applicable or suitable for everyone. Tax laws and regulations are subject to change, and it is important to consult with a qualified tax advisor or financial professional to obtain personalized advice tailored to your specific circumstances.

We strongly recommend that you seek professional advice before making any financial decisions and do not relying on the information provided in this blog post.