With the last financial year over and the next one newly begun, it might pay to think about taxes. One of the benefits of having a rental property is that, since it's considered a source of income, you're entitled to claim for a wide array of tax deductions.
If you happened to miss out on claiming deductions this year, then it might help to go through a refresher so you're prepared next June. After all, while you're still making repayments on your investment home loan, you'll want to maximise your profits and pay that debt off as fast as possible.
You can claim deductions on a variety of expenses related to your rental property, according to the Australian Taxation Office (ATO). This includes the money you spent advertising for tenants, the cost of cleaning the property, insurance expenses and the cost of getting the property pest-free. You can even claim expenses on land tax and council rates.
If your property has seen the ravages of time, you're able to claim expenses on repairing the 3 Ds of your property – damage, defects and deterioration. This includes fixing whiteware, painting the house or maintaining the plumbing. Bear in mind that the damage has to have occurred as a result of you renting out your property, otherwise you won't be able to claim for the repairs.
The interest accrued on property investment loans is another thing savvy investors will want to claim expenses on. According to the ATO, any loan that lets you buy a property, repair it or finance renovations for it has tax-deductable interest.
You can even claim deductions on travel expenses – in other words, the money you spent travelling to your property to inspect or maintain it. This is is especially important if you happen to own a property out of town, or even out of state!
These are just some of the deductions you can claim for. It might pay to speak to a home loan specialist for further guidance. Remember, though, you can only claim for the period your property was rented or available to rent.
You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we'll call you!
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.