Owning an investment property can be a rewarding experience, both financially and emotionally. Apart from the purchase cost of the property there are numerous other costs involved such as bank fees and interest, body corporate fees, conveyancing costs as well as stamp duty and other tax liabilities.

However, all of these extra costs need not leave the avid investor completely out of pocket. With a little tax knowledge and some professional advice you may be able to claim a majority of the expenses associated with the purchase, ongoing maintenance and the process of generating income from your investment property, as tax deductions.

Preparing tax returns and claiming deductions where investment properties are concerned can often be a complex area as there are usually not hard and fast rules that can be applied every time.

Whilst there are a range of expenses that can be deducted in relation to investment properties the criteria for all expenses is not the same. The three main types of rental expenses are:

  • Those that cannot be claimed
  • Those that can be claimed as an immediate deduction in the year that they are incurred, and,
  • Those that can be deducted over a number of income years

A deduction can usually be claimed for certain expenses that are incurred for the period that your property is being rented or is available for rent.

There are many contributing factors when determining your eligibility for claiming rental property deductions and as a result it is important that you always seek the advice of a professional tax accountant before making any major decisions. This will not only ensure that you are getting your maximum ATO refund that is legally due to you but also that you are legally compliant and not at risk of receiving any unexpected penalties or fines. If you want to maximise the return on your investment property, contact The Quinn Group on 1300 QUINNS or click here to submit an online enquiry.

Michael Quinn regularly contributes editorial features to a range of publications, including Your Investment Property magazine. Above is an excerpt from one such article. The full catalogue of items can be viewed at www.quinns.com.au/editorial-features