Investing in property can be a sound wealth-building strategy, but are you maximising your tax deductions? As a property investor, the Australian tax system offers numerous deductible expenses that can reduce your taxable income. Understanding and leveraging these deductions is key to building a profitable portfolio and expanding future investments.
Here are some of the key rental property expenses that Rental Providers should claim:
1. Loan Interest & Borrowing Costs
2. Property Management Fees
- If you use a professional property manager, their fees are fully tax-deductible, including advertising, lease preparation, and renter screening costs.
3. Council Rates & Water Charges
- Council rates and water service charges can be claimed in the year they are incurred, provided they are not paid by the renter.
4. Repairs & Maintenance
- Immediate deductions apply to repairs that restore the property to its original condition, such as fixing plumbing, painting, or replacing broken fixtures.
- Upgrades and improvements (e.g., renovating a bathroom) are considered capital works and must be depreciated over time.
5. Depreciation (Capital Works & Assets)
- Structural improvements (e.g., new kitchen, flooring) can be depreciated at 2.5% per year over 40 years.
- Depreciable assets like appliances, blinds, and carpets can be claimed based on their effective life. A quantity surveyor report can help maximise claims.
6. Insurance Premiums
- Rental Provider insurance, covering loss of rent, renter damage, and public liability, is fully deductible.
- Building Insurance, covering loss or damage to buildings at the property is fully deductible,.
7. Advertising property for Rent
- Costs related to marketing your rental property, such as online listings, print ads, or signage, are deductible.
8. Accounting & Legal Fees
- The cost of tax advice, accounting services, and legal fees for property-related issues (excluding property purchase costs) is deductible.
Tax deductions are a powerful tool to optimise your rental property returns, but keeping detailed records is essential. Work with a qualified accountant to ensure you're fully compliant with ATO regulations and not missing out on valuable claims. Any invoices paid on your behalf through Miles are stored in our Rental Provider portal and accessible to you at any time.
Make sure you’re claiming everything, talk to your Miles Property Manager who will assist you in maximising all aspects of your investment including tax, rental yield and renter retention while ensuring your property remains compliant and well-maintained for long-term success.
For expert property management advice, get in touch with us today!
Disclaimer: This article provides general information only and does not constitute financial or tax advice. Always consult a qualified tax professional or accountant to ensure compliance with Australian tax laws and regulations.
