This is a simple guideline to help you understand of some of the ways you can use your property investment tax benefits to increase your earnings. 1. Mortgage Expenses Mortgage Interest is usually your biggest deductible tax expense. As a landlord you can deduct mortgage interest payments on all your borrowing expenses as well as stamp duty bank fees. This also includes loans to improve your investment property and interest on credit cards for goods or services related to maintenance and other rental costs. 2. Depreciation Depreciation is the decrease in value of your property’s fixtures and fittings due to wear and tear, and is an eligible property investment tax deduction. 3. Insurance All the insurance premiums you pay for your property investment including your landlords’ liability insurance and employee workers compensation insurance are legitimate tax deductions. 4. Maintenance and Repairs Maintenance costs and repairs to your investment property are claimable. These include body corporate fees, land tax rates, gardening and landscape maintenance. Maintenance repairs can include painting and plastering, plumbing and the replacement of locks or broken windows. 5. Travel Travel expenses related to the management of your rental property collection such as the collection of rent and property maintenance are tax deductible. 6. Agents Fees & Contractor Hiring Any payments you make to contractors in the course of managing your property, including agent’s commissions, are tax deductible Examples of Investment Property Tax Benefit Deductions • Interest on mortgage and credit cards related to your property investment • Depreciation on furniture and fittings • General & landlord liability insurance • Agent fees • Body corporate fees • Maintenance and repairs • Bank fees & charges • Gardening & cleaning • State & local government taxes & fees • Office expenses • Travel • Agent, accountant & contractor fees To make sure you maximise your investment property tax benefits you need to keep an accurate record of all your claimable items including your receipts and bank statements. And it also makes good sense to also seek good financial advice.
