With tax time right around the corner, now is the perfect time to start thinking about your finances and what tax breaks you may be able to claim.
Regardless of whether you are a home owner or property investor, there will undoubtedly be a few property expenses that you may have forgotten about or didn't know you could claim.
For property investors, if your property is used to earn rent, you are eligible to claim expenses relating to the maintenance and upkeep of your property. These deductions include:
Advertising for tenants:
Typically, costs associated with the advertisement of your property can be claimed as a tax deductible expense. Any online and newspaper advertisement costs can be claimed as a tax deduction.
Travel expenses to view, maintain or inspect your property, can often be claimed as tax deductions. Whether it's a simple 20 minute drive, or an overnight stay somewhere, any costs relating to the travel you do to visit your property can (in most instances) be claimed.
Property repairs and maintenance are expenses that can - in most circumstances - be claimed as tax deductions. However, before making a tax claim on any repairs or maintenance, it is important to refer to the Australian Taxation Office to check what expenses must be claimed at the time of repairs and what can be claimed towards the end of the financial year.
If you happen to own more than one investment property in one state, land tax is an expense you are able to claim as a tax deduction. In most cases, you will only be able to claim a certain percentage of the land tax, however, to be certain of how much you are eligible to claim, it is important to sit down and discuss this with a trusted financial expert.
Real Estate Agent Fees
Fees pertaining to the use of property agents, as well their commissions, can be claimed as a tax deduction. In most cases, the fees paid to agents will be a percentage of your rental income, which would allow you to claim a majority (if not all) of the commission paid to the agent.
For homeowners, whether you work from home or have recently decided to renovate your property, you are eligible to claim multiple expenses relating to your dwelling.
If you work from home, you might be able to claim a portion of any repairs and maintenance you undertake in your work space/office. Any expenses relating to your business, such as furniture, may also be claimed through tax.
Home improvement loan interest
If you have taken out a loan in the past financial year, specifically to renovate or improve your home, you may be able to deduct the interest on your loan. That said, you can only claim this if the loan is used to improve the value of your home.
Any costs relating to the sale of your home, such as repairs, advertising fees and real estate agent fees, may be claimed as a tax deduction. That said, it is important to refer to the Australian Taxation Office to double check what repairs are eligible and when the claim should be lodged.