Property people and tax time deductions

| July 31, 2011

Property deductions , come tax time becomes a major focus for property people  with Investment properties  and  and property investment portfolio. Its that time of the year where  you get to minimize your tax  due to owning property  via depreciation  and so many other expenses borne out of the property.


The other benefit from owning  real estate  which can be  appreciation of value of  your property plus possibly a regular income flow  but also significant tax benefits.  some tips to benefit from property ownership during tax time.

Property people tax deductions

Tax deductions for property *

If you own a property  and you are getting rental income from it you can qualify for certain tax deductions based on your circumstances. Some standard claimable deductions are listed below.


  • Advertising costs ( To find tenants)
  • Agents Commission (To collect the rent)
  • Rates and Land Taxes
  • Depreciation
  • Travel costs to inspect property
  • Repairs
  • Security costs
  • Insurance on buildings
  • Water and sewage
  • Interest on borrowings



Rent and rental expenses

Tax needs to be taken out from rent received by you  when its received into or credited into your account. Rental expenses claimed can be disallowed  if you are renting a house or property to a relative or family and you are not charging them the going commercial rate in the market.


Capital gains Reductions


If you sell a investment property  12 months  after you buy it only 50% is taxable. This can apply to Land as well as Holiday homes.

Residence  exemption


Claiming tips


Keeping a separate account for your property income and expenses can ease the pain of record keeping.


It is not necessary for you to get a Australian Business Number (ABN)  if you want to lease a residential property.


Keep all your receipts for expenses for yuour tax deductible expenses to be easily verified.


More technical property deductions


In some cases  a building write off deduction can also be claimed  at the rate of 2.5 % per year


If you make a capital gain after you retire and turn 60  from the sale of the property , the gain could be tax free if  that property  was owned by your self managed superfund and would be not included in your taxable income.


Capital gains can be reduced on sale of holiday homes  by holding on to receipts of non –deductible expenses incurred while maintaining the house.


In some cases depreciation schedule will be necessary to maximise your allowable tax deductions on any property that you own as an investment.


* Before claiming deductions it is advised to see a professional accountant or tax agent  to verify that you are correctly claiming the  deductions that are allowed to be claimed without incurring any penalties in the future.

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Category: 2011, investment property, Property Market, rental properties, Tax Deductions

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