Know your rental prop­erty de­duc­tions

Townsville Bulletin - - Investor -

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

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