Forget Christmas! An investor’s favourite time of year is June 30. The beginning of tax time. A time to squirrel back as much money from the taxman as legally possible.
And if you’re a property investor, there is a plethora of deductions that can reduce your liability and put money back in your pocket.
That’s better than any pair of socks Santa might put under the tree.
But this year, the government has warned it’ll be keeping a close eye on investors.
So what are you actually entitled to claim?
An interesting deduction indeed
You fork out thousands of dollars a year in interest on your investment property’s mortgage.
Only the interest is deductible though — if you just enter the full amount that comes out of your account each month and it includes any principal, you’ll get pinged.
Call your bank and ask for an interest statement. They’ll be happy to provide one.
If your property wasn’t occupied or available for rent for the entirety of the year, get out a calculator and work out the interest paid only for the number of days that it was.
Everything including the kitchen sink
If you’ve put in some new carpet or light fittings, you can claim the depreciating value of them over a period of time.
But it’s not just new items that can give you back a few bucks. There could be a depreciable amount in that old clunker of a stove that came with the place if you owned the property prior to 9 May 2017.
That’s because there are now new rules around depreciation, so it’s best to get expert advice.
For a modest amount, you can order a depreciation schedule.
It’s a list of every item that and its claimable rate, and it’s done by a quantity surveyor.
If you’re planning on an extensive renovation, like a new kitchen or bathroom or some other form of capital works, get a depreciation schedule straight away and you’ll be set for years to come.
And, before you gut the place, get a surveyor to do a scrapping schedule, too.
Yep, that dingy old carpet you’re taking to the tip could have some value in it.
Bills, bills, bills
Don’t you hate that cold sweat you break into whenever you open a bill for rates, water, insurance or body corporate management? They’re no small amounts and they always seem to come at once.
You can claim these too, because they’re legitimate expenses involved in holding an investment property.
So, too, are the fees you pay for advertising for a new tenant, an agent to manage your place, a gardener to keep things tidy, as well as a cleaner or a handyman.
If you’ve just bought the place, your conveyancing fees are deductible, too.
Unfortunately, you can’t claim any costs associated with travelling to your investment property. You used to, but the government clawed back that perk in July last year.
Anything else?
It’s less likely in current market conditions, but if you’ve taken a hit on the sale of an investment property, you can claim the loss on the following year’s tax.
It might even take a bit of sting out of an investor’s hurt pride. But seek advice first.
Getting the right financial advice before tax time
The end of the financial year doesn’t have to be daunting for investors.
Keeping records throughout the year will make it easier to get everything ready come tax time as will working with experts every step of the way.
The world of banking and finance can be a pretty daunting one for both novice and sophisticated investors, and since our establishment in 2002 we’ve focused on providing outstanding service and business standards.
This approach has been vindicated many times by our multi award-winning approach.
So, if you’d like to understand more about investment property tax deductions, why not contact Intuitive Finance today to ensure you have the right information and expert support on your side from the very beginning.
If you’d like an expert to teach you more about you can claim and what you can’t or if you have any other questions, please just contact us directly and we’ll be in touch.
The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.
with clients all over Australia and around the world. Andrew has over 30 year’s experience in the finance industry and has assisted clients to secure over $2 Billion in mortgage lending over his time. Intuitive Finance deals with all aspects of lending from helping first homebuyers, someone wanting to upgrade their home or starting out and experienced investors looking to secure that next investment property, we can assist with all those requirements. We also specialise in working with self-employed clients and getting them the best outcomes, along with Commercial and Asset finance solutions. Intuitive Finance is highly regarded in the industry and has been recognised as a national winner of the MFAA customer service award and also one of the finance industry’s top mortgage employers. Our brokers also feature regularly in the Top 100 mortgage brokers list in Australia.
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