Many Australians unaware of tax deductions

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New research, conducted by Galaxy Research on behalf of non-bank lender State Custodians Home Loans, suggests many Australians could be missing out on the opportunity to buy investment property due to poor financial knowledge.

Less than half of those surveyed were aware of the main tax deductions that are claimable on investment properties. These include real estate management fees (only 44% are aware this is a deduction), depreciation on appliances (42%), interest payments on mortgages (39%), building and pest inspections (37%), depreciation on construction costs (36%), damage caused by tenants (35%), advertising for new tenants (34%), and gardening (27%).

Overall, women appear to be less aware about tax deductions on investment property than men, despite the fact that nearly half (47%) of Australians who own investment property are women.

A mere 23% of women are aware of stamp duty tax deductions, compared to 28% of men; 40% of women know real estate management fees are tax deductible, compared to 49% of men; and 39% of women understand that depreciation on appliances is tax deductible, compared to 45% of men.

Millennials (aged between 18 and 34) are also much less aware of tax deductions on investment property compared to those aged 35 years and older.

According to Joanna Pretty, general manager at State Custodians, making the decision to buy an investment property can produce a windfall; however, it can also be complicated.

“Investors need to be able to weigh up the likely capital gain against the costs of buying, maintaining and borrowing finance to fund the purchase,” she said. “It’s therefore important that people take the time to educate themselves by understanding what is claimable, as otherwise they may dismiss the idea of buying an investment property, when in fact it may be entirely do-able.”

Galaxy Research conducted the survey from October 12-15, 2017. It was administered online among a nationally representative sample of 1,006 Australians, aged 18 and older.   

Related Stories:
Women Are Better Property Investors
Your Guide To Confusing Tax Deductions


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