Getting the Most out of Your Rental Property

Are you making the most of your investment property? Getting the income and allowable tax deductions right can be a confusing task. We’ll help explain the details below so that you’re claiming all you can.  ​

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Income to declare 
All income earned from each property must be declared. If you have multiple properties, keep the records for each property separate to make preparation of the tax return more efficient. 

• Rent received – This must be included whether paid directly to you or through an agent/online management platform. Rent includes recurring regular amounts as well as any lump sum amounts paid in advance. 

• Rental bonds returned – for example, if the tenant caused damage or defaulted on rent payment and you received the bond as compensation. 
• Insurance payouts – insurance received for your investment property 
• Expenses reimbursed by the tenant – for example, if they have caused damage and you have paid for the cost of fixing the damages, or if they have reimbursed you for water usage. 
• Extra fees received – for example, letting or booking fees. 
• Government rebates – for example, rebates for installation of solar utilities. 

You will need to keep statements or recipient created tax invoices from agents or management platforms as well as documents for all other payments received. 

Tax deductions 
Deductible expenses are different for residential and commercial properties. Not all expenses related to owning a property are allowable as deductions, so it’s important to check what you can claim. 

Expenses you may be able to claim this year 

• Advertising for tenants 

• Body corporate/strata management fees 
• Council rates 
• Water supply charges 
• Land tax 
• Cleaning, gardening, pest control and property repairs & maintenance 

• Insurance 
• Agent management fees and other charges 
• Some legal expenses 
• Loan interest paid 

Other expenses 
There are some expenses which need to be claimed over a longer period of several years or decades. These can include borrowing expenses, capital expenditure, depreciation, initial repairs and capital works. 
Some expenses cannot be claimed for. These include stamp duty, loans and repayments, some legal expenses and some insurance premiums. 
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Get help to simplify your property records 
Tax matters for property investors can be complex. The ATO keeps a close eye on tax returns that involve property investment, as it’s easy to make mistakes. There are other matters to consider such as the period of rental availability, private use of the property, capital gains tax, legal contracts and positive or negative gearing. This year for many owners there will be insurance claims because of the flooding in Australia.
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We’d love to help ensure you are claiming the right deductions to make the most out of your investment property this year and beyond. Contact us to book a time to discuss your tax return and investment deductions.