Heading into tax time can seem a daunting prospect with understanding what you can and can’t claim on your investment property.
The good news is that a good property manager can help to keep track of your expenditure over your property and a great accountant will help with identifying and maximising the deductions that you can claim on your investment.
Some of the areas that your accountant may talk to you about considering when putting through your return.
Agent Fees
The professional fees that are charged by your Property Manager is one item that can usually be claimed. They may include fees such as the management and administration fees, marketing costs with finding a new tenant, letting fees and other ancillary costs that may be included with the daily management of your investment.
Rates and levies
During the time that the property is rented, you may be able to claim for the payment of council and water rates on the property as well as the strata levies that are incurred if your property is subject to a strata title and management. Strata fees for the management of a strata plan may also be included as part of this claim.
Repairs and Maintenance
Over the course of the life of a property, items will be subject to wear and tear and break down or need replacing over time. Your accountant can usually discuss claiming any costs or depreciation for the items that are repaired or maintained over the course of a tenancy.
Some of these items might include repairing or replacing items such as dishwashers, appliances, electrical or plumbing repairs, pest control, gutter cleaning, building maintenance or everyday maintenance like pool servicing and lawns and garden care.
Taxes and Interest
A good accountant will also discuss the option of claiming interest and land tax costs for the time that a property is tenanted, if you are eligible and calculate theses deductions to put through with your claim at tax time.
Depreciation
Investing in a professional tax depreciation report will assist at tax time with identifying the potential for depreciable items at the property based on its current age. Your accountant can then claim any potential depreciation that has occurred on the property and maximise the return that you can receive.
Professional Fees
Employing professional services like accountants and solicitors in the management of your property for specialised needs is an essential part of investment property ownership. Claiming the costs for these services should also be discussed with your accountant to include at tax time as well as any property insurances that are held over the investment.