Invest
How property investors can avoid costing themselves thousands
Ahead of the 31 October deadline for lodging tax returns, property investors are being warned to not leave thousands of dollars in the “Australian Taxation Office’s coffers” and take advantage of the deductions they are entitled to.
How property investors can avoid costing themselves thousands
Ahead of the 31 October deadline for lodging tax returns, property investors are being warned to not leave thousands of dollars in the “Australian Taxation Office’s coffers” and take advantage of the deductions they are entitled to.
On the eve of the tax deadline, the CEO of property investment company Custodian and author of 7 Steps to Wealth, John Fitzgerald, urged investors to take advantage of what they are able to claim.
“I’m continually surprised by the number of investment property owners who don’t even claim depreciation on their asset,” Mr Fitzgerald said.
“These deductions can be quite significant. I’m talking in the thousands of dollars, particularly when you buy a brand-new investment property.”
Mr Fitzgerald told investors who are new to the game that they can purchase a quantity surveyor for a few hundred dollars to prepare a depreciation schedule providing huge tax benefits to the investor.
“It’s a one-off cost,” Mr Fitzgerald said.
“A depreciation schedule generally lasts the lifetime of the asset and allows the owner to claim every year on the wear and tear of their property, which significantly reduces their taxable income.”
While the deductions for existing properties are not as significant, Mr Fitzgerald said there were still enough to make a depreciation schedule a worthwhile investment.
“That’s why property investment is such a great way to create wealth,” Mr Fitzgerald said.
“You can borrow money to buy an investment property and the interest costs can be tax deductible.
“Your property management costs and maintenance and repair costs are tax deductible and you can claim depreciation on the building.
“If you buy a property for $500,000, which after land is worth about $250,000, you could potentially achieve a tax deduction of about $10,000 a year.”
What can investors claim?
Mr Fitzgerald told investors the basics that they can and can’t claim this tax season.
New property:
- Capital works (the building itself)
- Fixtures and fittings (such as carpets, curtains, dishwasher and oven)
Existing property:
- Fixtures and fittings (such as carpets, curtains, dishwasher and oven)
Expenses you can claim on an investment property:
- Advertising for tenants, bank fees and charges including interest on loans, body corporate fees and charges
- Council rates and land tax
- Insurance, property agent’s fees and commissions, quantity surveyor’s fees and repairs and maintenance
Expenses you can’t claim:
- Travel expenses to inspect a property before you buy it
- Expenses for rental seminars about helping you find a rental property to invest in
- Travel expenses to inspect the property (unless you are using the property in carrying on a business).
About the author
About the author
Property
How to buy house and land packages in Australia
If you’re planning to buy a house and land package, it can be tricky if you’re not familiar with the ins and outs of such deals. Here’s our guide to make this purchase easier for you. ...Read more
Property
How first home buyers can take advantage of the budget
While the 2021 budget included a number of measures relevant to property investors, an expert has questioned whether any of them could yield an impact on rising buyer imbalances and reduced liveabilit...Read more
Property
First home buyers at the frontline of Frydenberg’s charm offensive
There are few surprises to be found in this year’s federal budget, with Australian property investors and first home buyers set to benefit from new and expanded measures. ...Read more
Property
May could be the beginning of the end for housing pricing boom
Experts have suggested that recent growth in prices could mark the peak of the pandemic bounceback for the housing market. ...Read more
Property
Treasurer announces home loan assistance packages for single parents
The federal government has announced a new scheme targeted at helping single parents with limited deposits into the housing market. ...Read more
Property
Australian housing market now valued at $8 trillion
The Australian dwelling market has reached a new record high, with the total value of residential real estate breaking the $8 trillion mark for the first time. ...Read more
Property
A generation of Aussies could be locked out of the housing market as prices boom
A booming property market is set to see a generation of younger Australians priced out of the market, a shadow assistant minister has said, challenging the narrative that younger people are failing...Read more
Property
Is the property market reaching its summit?
While home values continued to rise across the country in April, current trends are pointing to the possibility that the property market has peaked, a new report has revealed. ...Read more
Has the property market reached its peak; Biden’s climate summit and our sharemarket, and the upcoming budget
Listen now
Is the market overheating; should ETFs take your fancy, and what’s happening to the low and middle income tax offset?
Listen now
Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now
Raging floods, the tech stock bubble and the ongoing SG debate
Listen now
Property
How to buy house and land packages in Australia
If you’re planning to buy a house and land package, it can be tricky if you’re not familiar with the ins and outs of such deals. Here’s our guide to make this purchase easier for you. ...Read more
Property
How first home buyers can take advantage of the budget
While the 2021 budget included a number of measures relevant to property investors, an expert has questioned whether any of them could yield an impact on rising buyer imbalances and reduced liveabilit...Read more
Property
First home buyers at the frontline of Frydenberg’s charm offensive
There are few surprises to be found in this year’s federal budget, with Australian property investors and first home buyers set to benefit from new and expanded measures. ...Read more
Property
May could be the beginning of the end for housing pricing boom
Experts have suggested that recent growth in prices could mark the peak of the pandemic bounceback for the housing market. ...Read more
Property
Treasurer announces home loan assistance packages for single parents
The federal government has announced a new scheme targeted at helping single parents with limited deposits into the housing market. ...Read more
Property
Australian housing market now valued at $8 trillion
The Australian dwelling market has reached a new record high, with the total value of residential real estate breaking the $8 trillion mark for the first time. ...Read more
Property
A generation of Aussies could be locked out of the housing market as prices boom
A booming property market is set to see a generation of younger Australians priced out of the market, a shadow assistant minister has said, challenging the narrative that younger people are failing...Read more
Property
Is the property market reaching its summit?
While home values continued to rise across the country in April, current trends are pointing to the possibility that the property market has peaked, a new report has revealed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
