Investment Property Tax Deductions Australia | Orchard Mortgage Brokers | Sunshine Coast

Investment Property Tax Deductions Australia

Investment Property Tax Deductions Australia

It’s time to start thinking about your Investment Property Tax Deductions. Tax time is just around the corner, and with it comes the joys of trawling through boxes of receipts to calculate the investment property expenses. But while this is a tedious process, being thorough can pay off as it may allow you to reduce your investment property taxable income. In fact, more than 1.8 million Australian property investors claimed over $38 billion in deductions for the 2019-2020 financial year.

What Can You Claim On An Investment Property in Australia?

Running an investment property may be costly. The good news is that some of these expenses could be deducted from your taxable income.

Some of the main expenses you may be able to deduct include:

  • The interest component of your mortgage repayment
  • Advertising costs to look for new tenants
  • Property management fees
  • Gardening
  • Bank charges related to collecting and receiving rent on your bank account
  • Council rates
  • Land tax
  • Fees associated with evicting tenants
  • Security system maintenance
  • Taxation advice
  • Administration expenses
  • Repairs and maintenance
  • Water supply charges if the renters don’t pay them
  • Pest control
  • Property insurance
  • End of tenancy cleaning
  • Depreciation

If you want the exhaustive list of investment rental property tax deductions you might be able to claim this year, you’ll find more information on the  ATO’s website.

“Research shows that 80 per cent of property investors are failing to maximise the deductions claimed from property depreciation and are therefore missing out on thousands of dollars in their pockets,”

“Depreciation is often missed because it is a non-cash deduction – the investor does not need to spend money to claim it,” said Mr Beer.

Is Furniture Tax deductible For An Investment Property?

Property investors often wonder whether the furniture they purchased to furnish their rental property is tax-deductible.

Depreciating assets such as furniture or appliances could be claimed as expenses, but there’s a specific rule as to how much you may claim for your furniture every year.

If the piece of furniture costs less than $300, then it might be written off in full and immediately. However, for pieces of furniture over $300, you might only claim deductions for the item’s decline in value over its useful life. In other words, the amount must be spread out over the expected effective life of each piece of furniture.

How Can I Reduce My Investment Property Income Tax in Australia?

In addition to carefully tallying up your allowable deductions, here are a few tips that might help you minimise your investment property taxable income in 2022:

  • Digitise your receipts and keep all of your records in the same place.
  • Create a spreadsheet with your assessable income and expenses.
  • Use the services of a qualified accountant who will be able to advise you on deductions you qualify for.

We hope this article will help you increase your rental property tax deductions for the 2021-2022 financial year. Every dollar counts, especially if you want to save money.

Further reading and helpful links:

Link – ATO Rental Expenses You Can Claim

Blog Post – BMT Tax Depreciation Rental Property Tax Deductions

Thinking of Investing in Property on The Sunshine Coast?

Orchard Mortgage Brokers (located in Maroochydore) would love to help you navigate your way through all the information that you should consider before investing. 

We make it feel like a smooth process and we help our clients look at all the options available to them. 

Got Questions for Nicky Orchard?

Nicky has more than 20 years experience in the industry. Call and speak with Nicky. 

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