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Many parents invest in property as part of the retirement planning, but do you know all of the tax deductible items related to your investment property and maintenance? If not, you might be losing thousands of dollars each year.

While most investors are aware that there are tax deductible items associated with property investment, it’s an area that is rarely understood without the help of investment property finance specialists.

Investors who don’t know the ins-and-outs of property tax could be losing thousands of dollars each year, so it pays to know what can be claimed as a tax deduction.

Here is a quick overview of some of the most common tax deductible items that all investors should be aware of.

Depreciation on plant and equipment

Items deemed ‘plant and equipment’ on your investment property are depreciable items and are tax deductible. These can typically include carpet, air-conditioning units, appliances and blinds, among other items.

Depreciation on the dwelling

In some specific circumstances, the dwelling is a depreciable asset. This is for residential buildings where construction commenced on or after July 18, 1985 or where construction of structural improvements started on or after February 27, 1992.

Travel

In some circumstance, you can deduct transportation costs, such as running a car and depreciation, as well as meals or accommodation, if the property is a long distance from your principal place of residence. This typically applies if you’re preparing the property for new tenants, collecting rent, inspecting the property and maintaining or repairing the property. It does not apply to travel expenses relating to the acquisition or sale of the property.

Interest

If you’ve incurred interest on a loan for an income producing asset (i.e. an investment property), then that interest is typically tax deductible. Even if you have used your own home as security for some or all of the loan, it is still deductible.

Property management fees

If you pay a property manager to look after your property, then the fees can be claimed as a tax deduction.

It’s easy to see that there are many items that are classed as a tax deduction on an investment property. For depreciating items, such as the dwelling or plant and equipment, it’s best to pay an independent valuer for a depreciation report, which is a tax deduction in itself.

Do you know of any other tax deductions you can make on an investment property? Share with us in the comments.

  • yep this is very interesting to read and i didn’t know about it. it is also great to save money where you are able to. cheers for the information

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  • I didn’t know any of this. My landlords are so reluctant to fix up anything. When they do our rent goes up

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  • A lot of Property Managers deduct their fees from the rent the collect for you so your receive a net figure. Unless the laws have changed you can claim 10% depreciation on the interior items in your house but not the exterior, repairs, a fuel allowance to travel to do maintenance, dump rubbish from maintenance jobs. I was never told I could claim for meals. We bought the food, made our own meals and camped on the property by arrangement with the tenant.

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  • An article that is no doubt helpful for those with an investment property.


    • Will keep this in the finance folder for future reference.

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  • Thank you so much, this is very interesting indeed.

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  • Didn’t realise you could claim on carpet.

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  • It’s actually unbelievable that you get tax reductions on these things. We live in such a wealthy way and yet we feel we have to claim more and more.

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  • I never knew this. My landlords have recently done work on the house I rent. Now I know why……tax deductions!!! Plus they upped my rent too :(

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  • I think at least one visit with an Accountant would be very useful to make sure you’re not missing out on any possible deductions.

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  • I think an appointment with a tax accountant would be useful for anyone in this situation.

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  • I believe if you have furnished the investment property that too can have tax deduction benefits.

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  • Useful tips for those who own an investment property.

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  • I wondered about the travel deduction. Useful tips

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  • I’m surprised at the travel one.

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  • Interesting article.maybe useful in the future! Thanks.

    Reply

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