Whether you have already done your tax, or if it’s still on the to-do list, we have prudent tax tips for property owners wishing to maximise the return from their investment.
You can no longer claim tax deductions for the cost of holding vacant land. These changes apply to costs incurred from 1 July 2019, even if you held the land before that date
For those that have re-financed, mortgage discharge expenses are the costs involved in discharging a mortgage other than payments of principal and interest. These costs are deductible in the year they are incurred to the extent that you took out the mortgage as security for the repayment of money
You can claim the cost of fees such as regular property management fees or commissions you pay to a property agent or real estate agent for managing, inspecting, or collecting rent for a rental property on your behalf.
You are unable to claim the cost of commissions or other costs paid to a real estate agent or another person for the sale or disposal of a rental property and buyer’s agent fees paid to any entity or person you engage to find you a suitable rental property to purchase. These costs may form part of the cost base of your property for capital gains purposes.
With every tax return, there are claims and deductions you may be entitled to as an investor, you can find the full list on the ATO website. You may already be aware of most of these, but are you also claiming as much as you’re entitled to through depreciation?
Research from MCG indicates that many property investors are failing to maximise the deductions they can claim in this area. Some items you may not have thought to claim depreciation on include:
- Ceiling fans
- Door closers
- Exhaust fans
- Freestanding bathroom accessories
- Garbage bins and garbage disposal units
- Garden sheds
- Garden watering systems
- Intercom systems
- Smoke alarms
- Solar power generators
How to prepare for EOFY
Chat with your accountant to get more end-of-financial year tax tips and discuss a depreciation schedule for your property. They may recommend enlisting a quantity surveyor like MCG who can ensure you’re categorising your assets correctly and claiming all you can.
Our Investment Services team can also offer independent, specialist advice and support in all the areas of renovation, tax depreciation schedules, insurance and much more. Get in touch with the Investment Services team today.
Disclaimer: This information is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your situation, and for professional advice, seek out a financial adviser.