While most investors are aware that they are eligible for a range of different tax deductions, a significant number do not claim what they are entitled to and/or claim correctly. Yet if you make use of the tax provisions available to you as an investor, it is possible to make significant savings.


Depreciation awareness


More landlords need to become more aware of the benefits of depreciation schedules and claims if they want to save money. Get a registered quality surveyor to put together a depreciation schedule for you and it can pay dividends at tax time.


It is worth noting that it is possible to go back and amend previous returns to claim missed deductions from previous financial years.

Save via scrapping


Another often-overlooked property tax deduction is a scrapping schedule. An example of scrapping could occur if a landlord renovates the kitchen in a property between tenants, Chan & Naylor’s Ken Raiss says.


“A quality surveyor would put the value against all the stuff thrown away – eg: the cooktop, oven and dishwasher. They are then able to claim 100% of the remaining depreciation value left on each item.”

Remember land tax


Register for land tax – even if your property is under the threshold, Raiss advises. “If you are registered you will be sent reminders. This means that if your property reaches the threshold the resulting fees won’t catch you unawares, and there won’t be a penalty.”

Capitalise on repairs and maintenance


When it comes to maintenance and repair claims, many people write off costs they should be capitalising on. However, people need to be vigilant about understanding what needs to, and can, be capitalised, Raiss says.


“For example, if a landlord puts in a new kitchen, that is depreciation – not repairs and maintenance costs. But if a landlord does some upkeep work on the kitchen plumbing that is repairs and maintenance.”


Once again, it is difficult to quantify the amounts you could save in this area – due to the large variability of all sums involved in every individual repair claim.


Claim everything you can legally


It is generally received wisdom that you should always claim everything you possibly can. As with depreciation and scrapping, the amounts that this can save you varies from claim to claim.


However, Raiss says it is worth remembering that:


  • Tenancy costs - like preparation of a lease agreement or costs associated with evicting a tenant - are immediately deductible expenses.
  • It is possible for landlords to claim for travel expenses. The costs of travelling to and from properties are deductible.
  • Getting a split loan, with 2 statements to better track deductable interest, allows you to swap funds between loans (apportioning interest each time). It also helps to get a tax deduction and to reduce compliance costs.