The end of the financial year is fast approaching, so it’s time to think about how to get the most out of your property investment related deductions. So how can you maximise your refunds?
"Knowing what expenses can be claimed over the short and long term can make a big difference to a tax refund. In preparation for lodging a tax return, now is a good time for property investors to organise any receipts and statements that relate to their rental property or properties," said Mortgage Choice spokesperson Belinda Williamson.
She added that there are a range of expenses that can be claimed as tax deductions that may have slipped your mind. These include:
body corporate fees;
building maintenance and repairs;
home loan fees and interest payments;
council and water rates; and
the cost of travel to and from the property for inspections.
"One aspect that property investors often overlook when lodging their tax return is depreciation deductions,” she added. “Depreciation applies to new and existing residential properties and in most cases owners of an investment property or properties are likely to be able to claim something."
"Depreciation on the original costs of construction can be claimed on any residential property built after 17 July 1985. However, it is always a good idea to check with the Australian Taxation Office or a depreciation specialist as there may be exceptions to this rule. Claims can also be made for items that are falling in value over time, such as fixtures and fittings, floor coverings, appliances and built-in wardrobes. Owners in strata buildings should keep in mind they may be able to claim depreciation on a portion of the value of items and equipment in common areas, such as carpets and furniture in foyer areas.
"Each investor's situation is different and for this reason it is important to consult a financial planner and/or accountant to help determine any tax deductions."
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