Parramatta Blog

As the end of the financial year approaches, property investors with rental income have an excellent opportunity to optimise their tax returns through various deductions. There are various ways this can be achieved and will be recognised throughout this blog.

Here's what you can claim as a property investor:

 

Maintenance and Refurbishments

One of the significant benefits of property investment is the ability to claim expenses related to repairs and maintenance. These can include:

Plumbing and Electrical Work: Costs for fixing leaks, installing new fixtures, or repairing electrical faults.

Property Upkeep: Regular expenses like painting, flooring, and general upkeep.

It’s important to note that renovation and extension expenses fall under capital works. These are typically deducted over 25 to 40 years. If you need repairs or improvements completed before the end of the financial year.

 

Negative Gearing

Negative gearing is a popular tax strategy among property investors. Here’s how it works:

Borrowing for Investment: The strategy involves borrowing money to purchase an investment property.

Expense vs. Income: When the expenses exceed the rental income, the net loss can offset your taxable income.

Eligible expenses for negative gearing include:

• Mortgage interest
• Maintenance costs
• Agent fees
• Advertising costs
• Asset depreciation

This strategy allows for a short-term loss on your investment property in exchange for potential long-term capital growth and favourable tax treatment.

 

Capital Works

If you've undertaken significant renovations or construction before renting out your property, you may be eligible for tax deductions under capital works. The deduction rate and duration will depend on the age of your property and the extent of the work done.

 

Leveraging Tax Deductions

Many landlords seek to save money and maximise their financial security. Understanding and utilizing available tax deductions is crucial in this effort. By doing so, you can make the most of your property investment with substantial tax benefits.

For detailed information on the tax deductions, you’re entitled to as an owner-occupier and property investor, consult your accountant or visit the ATO website.

In addition to our expertise in selling, purchasing, or leasing commercial properties, we also have a dedicated team that specialises in every aspect of residential property. If you require advice or more information about your next property move, please don't hesitate to reach out to any of our property managers at any time.

*WRITTEN BY JAYDEN AYOUB | COMMERCIAL SALES & LEASING