Rental Property for Investors

Investment property

Do you know which expenses are non deductible?

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  • Travelling expenses in search of a property to purchase, these are capital and are included in the cost base of the property
  • Legal costs and stamp duty are also included in the cost base of the property
  • Borrowing costs associated with the purchase of the property cannot be claimed outright
  • Initial repairs that were required to be carried out shortly after the purchase of the property and before it was rented out are capital costs
  • Interest expenses once the property has ceased to produce assessable income. Partial interest deduction is allowed if the loan is also used to for private purposes. It is recommended to use separate bank accounts or keep accurate records related to the rental property portion of the loan
  • Capital works and the replacement of a complete structure such as fences, driveways. These expenses can be claimed under capital allowances at the rate of 2.5% per annum
  • Expenses incurred while the property is used for private purposes
  • Disposal costs which are capital costs

Rental expenses are generally deductible if the property is rented or available for rental.

Do you have a question regarding tax deductions? Do not hesitate to contact our office for further information. We can provide you with a rental property income and expenses template to assist you in the preparation of your tax return.

Download rental property schedule

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