Know your rental property deductions
PERUSING various ATO ruli n g s a n d i n t e r p r e t a t i v e views have provided the following tips for landlords.
The following will be deductible expenditure:
The cost of removing carpets and replacing them by sanding and polishing the floors is a repair as it is accepted that the polished floor is equivalent to recarpeting.
Interest and holding costs such as rates, land taxes and fire levy for owning vacant land if you can show that you intend to earn income from the property. For example you buy the land to build a rental property.
If you sell your rental property for less than your loan, the interest on the outstanding loan.
Legal costs to recover un- too early for there to be expenses incurred in earning rental income:
Pest inspections prior to purchasing your property.
The costs of travel and accommodation to inspect a rental property prior to purchasing.
Consulting fees paid for locating and assisting in purchasing your property.
Costs associated with attending an investment seminar in relation to investing in rental properties. However, if you have a number of investment properties and attend a seminar in relation to your existing properties the costs will be deductible.
You can claim for repairs of all of the items whether they relate to the building and fixtures or depreciable items. However where the repairs are substantial and essentially a replacement in entirety then the item will take the character of what it is replacing and won’t be a repair.
The following expenses are only able to be included in the construction cost and subject to the building writeoff claim: The cost to construct the building, garage, driveway, kitchen cupboards and tiles. The list is not limited to these and the general principle being these are things are affixed to the building.
If you have any tax quest i o n , e m a i l David. Hall@ whk. com. au.
This advice is general in nature. Readers should seek specialist advice before making financial decisions. WHK Pty Ltd ABN 84 006 466 351