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Rental Property Expenses you can Claim

Investors are entitled to tax deductions for their investments. Knowing what those deductions are and how you claim them can save you from paying more than you should.

Some rental property expenses can be claimed right away as an immediate deduction. These include:

  • repairing guttering, windows or fences damaged in a storm
  • maintaining plumbing, painting, oiling, brushing or cleaning something that is otherwise in good working condition or repairing electrical appliances or machinery
  • preparing a lease agreement with your tenant
  • evicting a tenant
  • interest on a loan to
    • purchase a rental property or purchase land to build a rental property
    • purchase a depreciating asset for the property like an air conditioner
    • finance renovations like a deck, or
    • make maintenance repairs or repair damage to the property.

Of course when you purchase a rental property you also purchase depreciating assets such as stoves, air-conditioning and hot water systems. These can be claimed over a number of years as a ‘decline in value’ deduction.

And it is not just depreciating assets relating to the rental property that can be claimed over a number of years.

Borrowing costs that are part and parcel of purchasing a property can also be claimed, including stamp duty charged on the mortgage, loan establishment fees and valuation fees for loan approval. Building construction and costs for improvements to the property made by you or the previous owner are also among the deductions that can be made (usually over 25 years).

The ATO website has useful and easy to read fact sheets that explain exactly what can and cannot be claimed as a tax deduction, including some useful examples. Visit www.ato.gov.au/rental

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