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Valuable rental property tax deductions
Find out about the valuable rental property tax deductions. Accountant Sydney will help with rental property tax deductions. Did you recently buy an investment or rental property? Or you are looking to buy one? Now is the best time to learn more about the tax consequences. As well as all your rental property tax deductions and how it can impact your tax refund.
The first point you need to understand is that you need to declare your rental income. Once you lodge your tax return, it is imperative that you let the ATO know these details. The details such as how much rent and rental-related income you receive. Rental income includes, booking fees, letting fees.
Secondly, in every new financial year, you need to:
· Keep all records
· Calculate the expenses that you can claim as deductions
· Consult with an accountant in Sydney to know if you need to pay tax instalments throughout the year
· Declare your rental-related income in your tax returns
· Consider capital gains tax implications if you sell.
Thirdly, if you have an investment property that it doesn’t produce rental income. This means it is not rented. Or available for rent, therefore you cannot claim deductions. This is for the simple fact that the property does not generate any rental income.
Tax Deductible Rental Property Expenses
With the basics on property tax out of the way, it is time to look at the most appealing part; tax deductions. If you own a rental property that you earn income from, you can claim any expense. This is provided that it is associated with earning that income.
Considering rental property expenses, you have a wide range of possible tax deductions e.g. depreciation over 40 years.
This type of report is available from quantity surveyors. An example of such a surveyor is BMT Tax who can provide you with a depreciation schedule. Tax Depreciation report fees are tax deductible. That will help boost your tax refund as well as leave more refund in your pocket.
As property investors you can only claim deductions on your during the tenancy. The property must be available for rent during this time. Working with an expert, Accountant Sydney will help compile all available tax deductions. Here are some of the most valuable rental property tax deductions in Australia. You as a property investor should know the following deductions;
There are advertising costs involved when searching for a new tenant. Advertising is an expense and you can claim this expense as a deduction if you own a rental property.
· Bank fees and charges
Any bank fee that is incurred as a cost for generating rental income can be claimed. If you are not sure, speak to a bookkeeping and accounting service provider for clarification.
Do you own a holiday home that you rent out on a weekly or monthly basis or a furnished property where a tenant moves out and you have to get it cleaned? The cleaning costs can be claimed as a deduction. These are expenses that help generate income.
· Depreciable assets
Depreciable assets like carpets, light fittings and curtains can be claimed. These assets can be depreciated. Remember that the process can be confusing so always work with a surveyor or an accountant in Sydney.
· Travel costs
All expenses associated with getting to the rental property and maintaining it can be claimed. This includes costs incurred when driving or flying to the property. Your accountant will help you know what you can claim.
If you have landlords’ insurance, this expense can be claimed. This is because you need the insurance cover to help generate income.
There is an interest cost associated with a property mortgage. If you are paying the principal and interest, the interest expense is tax deductible.
Legal expenses linked to buying or selling a property are not necessarily tax deductible. These expenses are deductible if you need ongoing legal consultation. It is always good to consult with tax agent service so that you can maximise your selling rental property tax deductions.
Other valuable property tax deductions include:
· Body corporate fees
· Electricity and gas
· Lawn mowing and gardening
· In-house audio/video service charges
· Council rates
· Capital works
· Pest control
· Land tax
· Mortgage discharge expenses
· Repairs and maintenance
· Security patrol fees
· Stationary and postage
· Telephone calls and rental
· Tax agent fees
· Water charges
· Property related purchases less than $300 or the depreciation of purchases above $300
You can claim deductions for the above expenses. If you actually incurred the expenses and they were not paid for by the tenant. This means you will not be able to claim expenses someone else paid such as electricity bills paid by tenants.
The stamp duty can also not be claimed part of your ongoing expenses. This will fall into the capital costs. Any expenses related to private purposes won’t be part of the tax deductions either. To understand all your options, liaise with an experienced accountant in Sydney.
If you held the property for more than 12 months capital gains tax exemption will apply. Capital improvements you make to the property are not tax deductible in full. If you have any questions that you need to know about your rental property tax deductions give us a call on 1800 722 787.