Investment Property Tax Deductions (Rental Properties)

If you’ve recently ventured into the realm of investment properties or are contemplating such a move, understanding the associated tax consequences and potential deductions is crucial. Bottrell Accountants & Financial Planners, with a footprint in Newcastle, East Maitland, Gold Coast, and Gosford, is here to provide you with an in-depth guide on how investment properties impact your tax return.

Rent:

Taxable Income:
- The income received from your investment property is taxable, distributed among the property owners based on their ownership interest as reflected on the title.
- Rental income must align with normal market rates to claim full deductions. Charging below-market rent limits deductible expenses to the amount of rent charged.
- Declare rental income in the year it is received.

Interest Claims:
- Interest paid on loans used to purchase the property is deductible, provided the borrowed funds were exclusively used for property acquisition.
- For accounts used both as a line of credit and privately, interest claims must be proportionately apportioned for private expenses.

Tax Deductions:
- Repairs:
  - Repairs during the property’s lease period are deductible, excluding those made within the initial 12 months of ownership, which can be used to reduce capital gains on disposal.

- Improvements:
  - Improvements are not fully deductible; they should be depreciated over their effective life.
- Other Deductible Expenses:
  - A comprehensive list of deductible expenses, including advertising, bank charges, council rates, insurance, and more.

Building Cost Write-off:
- If the building is under 25 years old, a deduction of 2.5% per year of the original construction cost is claimable for up to 40 years.
- Quantity surveyors, (offering a discounted fee for Bottrell Accounting, Tax & Financial Planning clients), can determine building costs and prepare depreciation schedules.

- - BMT Tax Depreciation – see link
  - Capital Claims – See Link
  - MCG Quantity Surveyors – See Link

Record Card for Property Investors:

Ask at our offices for a free copy of a record card designed for property investors.

Client Tax records Envelopes:

Utilise our Client Tax records Envelopes to organize receipts and documents for the year. Unsure about an expense? Keep the receipt, and we’ll ensure all allowable deductions and rebates are claimed during your tax return preparation.

At Bottrell Accountants & Financial Planners, we are committed to assisting you in navigating the complexities of investment property taxation. Contact us today at 02 4933 6888 or visit our offices for expert guidance tailored to your specific needs.

Rental Property Information

Our Bottrell Tax Team have provided a series of helpful Rental Property Information:-

Addressing Mistakes:

If you realise a mistake in your tax return, don’t panic. It’s a common occurrence, and the key is to address it promptly. Ensuring meticulous information gathering and supporting documentation when filing your tax return is essential. Only claim genuine deductions to avoid penalties and potential prosecution by the ATO. If you self-lodge and identify inaccuracies or unsubstantiated claims, contact Bottrell Accountants & Financial Planners immediately for assistance in making necessary amendments.

For any further questions regarding your tax return, reach out to Bottrell Accountants & Financial Planners. Our experienced consultants are ready to help. Call us at 02 4027 5782 for details or book an appointment online at your nearest office.

What happens if I make a mistake in my tax return?

Exercise caution when assembling information and supporting documentation. Only claim genuine deductions to avoid penalties or prosecution. If you realise errors, promptly contact your accountant for necessary amendments.

About Bottrell Accountants, Tax Agents & Financial Planners

Our Accountants office, founded by Director Gavin Bottrell in June 2012, offers a range of advice services, including Personal Tax Returns, accounting, SMSF, business advice, and business growth to small, medium, and large businesses as well as individuals across Australia.

Bottrell Accountants & Tax Tips – See Link

Office Locations

Our Accountants, Tax Agents & Financial Planners are located at:-
Newcastle – 45 Hunter St, Newcastle, NSW 2300
Maitland – 93 Lawes St, East Maitland, NSW, 2320
Gosford – 86 Mann St, Gosford NSW 2250
Gold Coast – Level 13/50 Cavill Ave, Surfers Paradise QLD 4217

Bottrell are your local team providing expert Tax Advice, Accounting, Audit, Bookkeeping, SMSF & Financial Planning services.

Contact us Today!

Take the first step towards maximising your tax refund – contact us today at Bottrell Accounting. Our dedicated team is ready to assist clients like you. Call us at 4933 6888 to schedule an in-person, phone, email or Zoom appointment.