5 Investment property tax time tips for landlords

The latest statistics from the ATO show that, despite earning $28 billion in rent last year, Australian landlords still reported a $4.8 billion loss.

If you’re a landlord who wants to come out on top this tax time, start familiarising yourself with these legitimate tax deduction benefits for investment property purchases, which you may be entitled to claim:

1. Travel expenses

Just like driving around for traditional business purposes, landlords can reduce their tax bills by claiming travel expenses to visit their rental properties. News Limited reported that more than 700,000 landlords claimed a combined $738.6 million in the 2008-09 financial year for travel to collect rent, inspect and make improvements to the property. This included both car and air travel.

Speak with your tax accountant to determine whether claiming a standard mileage rate for travel, or deducting actual expenses (fuel, vehicle upkeep and repairs, return flights) is more beneficial for your circumstances.

2. Mortgage expenses

Any interest relating to the money borrowed for an investment property is tax deductible. You cannot, however, claim loan repayments as an interest deduction. Also, if you’re negatively geared, it’s one of Australia’s biggest tax breaks for property investors.

3. Lawn care

Do you contract a lawn service to cut the grass of your rental property or manicure the gardens? These expenses can be written off. Apartment complex owners are usually required to pay quarterly strata fees to cover exterior maintenance, lawn care and general upkeep of the building. This is also deductible.

4. Maintenance and repairs

If something outside or within the rental property breaks, the landlord must fix it. Therefore, repairs and maintenance costs ensuring your investment property stays in good shape are all tax deductible. Installing a new dishwasher or air conditioner? That’s a tax deduction too.

5. Security and insurance

The total cost of insuring the rental property and landlord insurance is tax deductible. This includes writing off any losses incurred by late rent, burglaries or damage from natural disasters.

Remember to document all expenses and keep records for every claim, as the Australian Tax Office can ask you to produce proper documentation from up to seven years prior.

To ensure you’re able to take advantage of every landlord deduction possible, hire a professional tax accountant. The result can equate to a great return on your rental property investment.

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