The amazing tax benefits from rental properties you probably forgot about
Thinking about tax is much more fun when you’re thinking about tax benefits. Property investment is a tricky game to play, but smart investors reap the rewards when they remember to claim on the below items.
Tax depreciation
The tested-and-true method, and Deppro’s speciality. Getting a tax depreciation schedule ASAP is a guaranteed way of earning back the money from your portfolio. It’s one of few tax benefits that doesn’t discriminate.
It’s best for the quantity surveyor to do their inspection before the tenants move in. When the investor does renovations, they’re obliged under ATO law to tell the surveyor how much was spent. Measures like this make sure that the maximum benefits are awarded.
The depreciation fee is a tax benefit; it’s fully deductible!
Capital gains tax
Yes, there are some benefits to capital gains tax, particularly thanks to the exemptions available!
It’s not available to your entire property portfolio, typically the exemptions apply to the home you actually live in. You can get a full exemption if you live in the home for at least 6 months after buying and can prove it’s your primary residence.
Another full exemption is possible if you own the home but have to move thanks to special circumstances. You can lease out the house during this time for a maximum of six years before you have to pay some CGT.
Claim against the mortgage
You probably think that ‘mortgage’ and ‘tax exemption’ don’t go together in the same sentence but it’s possible! But tax benefits like this come with conditions.
Investors with interest-only loans can claim against it come tax time. Interest is the money you’re making on the house/commercial space.
General upkeep fees
It’s the owner’s responsibility to make the property presentable. Because these services are of benefit to the rental property they’re possible to claim. Examples of maintenance fees include cleaning, fixture repairs, pest control, gardening, and more.
Management costs
You have to spend money to make money as the saying goes. Real estate advertising and fees paid to the property manager can be claimed as tax benefits alongside other management costs. Some of these are overlooked and owners potentially miss out on thousands.
- Body corporate
- Council fees
- Land tax
- Legal fees
Cleaers, real estate services, property management services…all eligible for tax benefits
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