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Tax Tips For Property Investors

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The year end is fast approaching, and it’s time to take stock of what can be done to get some tax deductions in this year’s tax return.


Don’t forget that the government has recently removed the ability to claim a tax deduction for travel when inspecting rental properties. With too many people claiming tax deductions for trips that were more like holidays, the impact is felt now by those who were genuinely travelling for inspection. If tax is the motive, don’t bother planning that trip for property inspections.

Prepaid  expenses

Bring forward any maintenance expenditure that needs to be completed by 30 June. Be sure to distinguish between what the ATO considers to be a ‘repair’ and what is an ‘improvement’, as improvements are non-deductible.


Pre-pay interest on property investment loans if there is adequate cash flow in order to claim an immediate deduction. Investors may choose to pay interest in advance to simplify finances by making one prepayment of interest upfront or protect against possible interest rate rises over the 12 month period.

Short-term holdings

Renovating a property with the intention of selling it for profit in the short term may incur tax as a “profit-making scheme”. GST concessions will not be able to be taken advantage of as a result.

Personal expenses

Ensure that any claims or interest on borrowings for investments can be clearly separated from interest on borrowings of a personal nature.

Depreciation  deductions

A qualified quantity surveyor can provide a depreciation schedule outlining the available tax deductions and providing a significant return. The cost of having a depreciation schedule prepared is also tax-deductible.

Repairs at time of purchase

Expenses for property repairs are deductible provided that they relate to wear and tear or other damage as a result of earning rental income. The cost of initial repairs at the time of purchase are not deductible. It must be completed before 30th June to be in this year’s return.

If you have any questions about tax deductions for your property contact your accountant for advice.

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