End of Financial Year isn't far away
As we get closer to end of financial year, it's time to start thinking about the two main categories in which the Australian Tax Office (ATO) allows deductions on investment properties.
1. Expenses incurred during the financial year.
Some of these might include repairs and maintenance, council rates, agent fees, marketing, cleaning, pest control, gardens, insurance, and interest on loans.
If you have NOW Leasing NT managing your property, all these items will be itemised in your end-of-financial year statement and supplied after 30 June. Previous EOFY statements can also be accessed through owner portals. If you’re a client of ours and you’ve forgotten your login details, contact our office and we can get you up and running.
2. Deductions that can be claimed over several years
If you have a loan for your investment property, all borrowing expenses can be claimed over 5 years or the term of the loan. What suits you, is best discussed with your accountant.
Borrowing expenses include borrowing fees, mortgage insurance, title searches, and mortgage broker fees just to name a few.
The trickier items to make sure you claim in the right category include improvements, depreciation, capital works, and capital allowances. In these instances, it is best to refer to the ATO guide which can be found here https://www.ato.gov.au/Individuals/Investments-and-assets/Residential-rental-properties/.
Having a depreciation schedule for your investment property is also a good idea to maximise your deductions. These can be done by a quantity surveyors plus you can claim the cost on tax!
To claim any deductions against your investment, the property must be tenanted or genuinely made available for rent. It must be liveable, reasonably priced, and genuinely listed for rent.
While we endeavour to provide the most correct and up-to-date information, we highly recommend you consult with a licensed tax agent or accountant that specializes in investment properties.