Do you own rental property? By deducting rental property expenses on your tax return you can access an incredible range of possible tax deductions that can boost your tax refund and leave more rental income in your pocket.
It’s important to stay on top of your rental property tax deductions and claim them correctly to maximise your tax refund (without getting into hot water with the ATO).
What are Tax-Deductible Rental Property Expenses?
If you own a rental property that you receive an income from, you can claim any expense associated with earning that income. Rental property expenses are deductions (from your taxable income) of expenses relating to the owning and operating a rental property. And there are lots of them!
For example, if you pay insurance on your rental property, it is an expense you pay to earn income from the property. If you did not own the property you would not incur the expense.
To help ensure you are making correct claims on your next tax return, we’ve listed 27 Rental Property expenses for you to check before the end of the year:
- Advertising for tenants
- Bank charges
- Body corporate fees
- Council rates
- Electricity and gas
- Gardening and lawn mowing
- In-house audio/video service charges
- Insurance – building, contents, public liability
- Interest on loans
- Land tax
- Legal expenses (Only related to managing the property. Legal fees on the purchase of the property are not claimable).
- Lease costs – preparation, registration, stamp duty
- Mortgage discharge expenses
- Pest control
- Property agent’s fees and commissions
- Capital Works
- Quantity surveyor’s fees
- Repairs and maintenance
- Secretarial and bookkeeping fees
- Security patrol fees
- Servicing costs e.g. servicing a water system
- Stationery and postage
- Telephone calls and rental
- Tax-related expenses
- Travel and car expenses – travel for rent collection, inspection of property, maintenance of property (No! This deduction is no longer acceptable. It was valuable at one time, but the ATO took it away. Do not try to claim this.)
- Water charges
Another useful bit of information:
If you prepay one (or more) of your rental property expenses, such as insurance, that covers a period of 12 months or less, and the period ends on or before June 30, you can claim an immediate deduction. A prepayment that does not meet these two criteria and is $1,000 or more may have to be spread out over two or more years.
Do you have a rental property? Have you been claiming all of the deductions you were entitled to?
Tell us you thoughts over on Facebook or if you prefer, email the team on [email protected].
If you use etax.com.au for your tax return, the new tax form makes it easy to enter your Rental Property expenses and if you have any questions, you can enter them it at “My Messages” right in your online tax return… and a qualified accountant will get back to you.