With the end of the financial year just around the corner, now is the perfect time to get your affairs in order when it comes to your investment property. We spoke to accounting expert, Kevin Scambler, who recommends you keep an eye on the following expenses so you can claim the maximum rental deductions at tax time.
- Accountancy and taxation fees
- Borrowing expenses
- Body corporate levies
- Quantity surveyor reports
- Gardening, maintenance & general repairs
- Building & contents insurance
- Interest on borrowed money
- Land tax
- Legal fees to collect debts
- Agent management fees
- Mobile phone/postage/printing/stationery
- Rates – land and water
- Landlords insurance
It’s always best to talk to a professional for the best tax advice. The ATO has recently warned that they’re “setting their sights on the large number of mistakes, errors and false claims made by rental property owners who use their own property for personal holidays”.
As a result, the ATO has reminded holiday home owners that:
- They can only claim deductions for a holiday home with respect to periods it is genuinely available for rent.
- They cannot place unreasonable conditions on prospective tenants/renters, set rental rates above market value, or fail to advertise a holiday home in a manner that targets people who would be interested in it and still claim that the property was genuinely available for rent.
- Where a property is rented to friends or relatives at ‘mates rates’, they can only claim deductions for expenses up to the amount of the income received.
- Property owners whose claims are disproportionate to the income received can expect greater scrutiny from the ATO.
- If it is only available to rent for part of the year then expenses must be proportioned.
If you’re after taxation advice, structuring for maximum tax deductions or the benefits of a Company or Trust, talk to Kevin and his team at ATOM Accounting & Taxation.
If you’re thinking of purchasing an investment property or holiday home and aren’t sure where to start, give our office a call and one of our professional sales agents can guide you through the process and answer all your questions. Our team at AW Money can even help you find the right loan!