Tax Deductible Expenses in Rental Properties

An Australian property investor needs to deal with a lot of things. One of these is tax. If you have a rental property, there are tax-deductible property expenses that you should know. If you own a rental property and you get an income from it, you can make claims on any expense incurred in earning that income.

Here’s one important thing to remember:

If you pay one or more of your rental property expenses in advance that covers 12 months or less, and that period ends on or before the end of June, you can claim an immediate deduction. This prepayment can include insurance. If it doesn’t cover 12 months or less, doesn’t end on or before June 30, and is at least $1,000, it may have to be spread out over two years or more.

These are deductions from your taxable income that are associated with operating your rental property. Bear in mind that it is still better to seek professional advice so you will have a better understanding of what you can and cannot claim.

You can claim numerous expenses that are related to running and managing your rental property. However, it will apply only for the period that your property was rented or available for rent.

Here are the tax deductible expenses in rental properties you can claim:

  • advertising for tenants
  • bank charges
  • body corporate fees and charges
  • borrowing expenses
  • capital works
  • cleaning
  • council rates
  • depreciation of assets
  • gardening and lawn mowing
  • insurance
  • interest expenses
  • land tax
  • legal costs
  • pest control
  • phone usage
  • property agent fees and commissions
  • repairs and maintenance
  • stationery and postage
  • travel done to inspect or maintain the property, or to collect rent
  • water charges

It is likewise important to know the expenses that you cannot claim when it comes to your rental property. Expenses you cannot claim include the utility bills which are paid by your tenant/s, as well as those that are related to your personal use of the rental property.

About the author  ⁄ Marxa Dillan

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