Investment Property Tax Deductions Explained
Here is a list of the deductible items for investment properties. Maximising your property investment tax benefits will make an important contribution to the profitability of your property investment. This is a simple guide to help you understand of some of the ways you can use your property investment tax benefits to increase your earnings.
Mortgage Interest is usually your biggest deductible tax expense. As a landlord you can deduct mortgage interest payments on all your borrowing expenses as well as stamp duty & bank fees. This also includes loans to improve your investment property and interest on credit cards for goods or services related to maintenance and other rental costs.
Depreciation is the decrease in value of your property’s fixtures and fiƫtings due to wear and tear, and is an eligible property investment tax deduction.
All the insurance premiums you pay for your property investment including your landlords’ liability insurance and employee workers compensation insurance are legitimate tax deductions.
Maintenance and Repairs
Maintenance costs and repairs to your investment property are claimable. These include body corporate fees, land tax rates, gardening and landscape maintenance. Maintenance repairs can include painting and plastering, plumbing and the replacement of locks or broken windows.
Travel expenses related to the management of your rental property collection such as the collection of rent and property maintenance are tax deductible.
Agents Fees Any payments you make to contractors in the course of managing your property, including agent’s commissions, are tax deductible
Examples of Investment Property Tax Benefit Deductions
• Interest on mortgage and credit cards related to your property investment
• Depreciation on furniture and fiƫtings
• General & landlord liability insurance
• Agent fees
• Body corporate fees
• Maintenance and repairs
• Bank fees & charges
• Gardening & cleaning
• State & local government taxes & fees
• Oﬃce expenses
• Agent, accountant & contractor fees.
To ensure you have this all covered part of the Investate process is to ensure you have the right insurances in place, the right accountant looking after your tax returns and the right property manager ensuring your property is always rented out at the best possible price.