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What can you claim?

June 8th, 2015 by Geoff Baldwin

Interest paid on the mortgage is usually your biggest tax claim however there are many other items that can be offset against your income tax liability. These items can be broken down into:

a. Cash items, in other words, things that you pay cash for during the year to support or maintain your property.

Some examples of cash items are;

Land and water rates
Property managers fees
Strata levies
(if you purchase a property in a strata complex, each owner usually pays a levy towards the maintenance of common areas, security lighting, insurance, etc)
Postage and stationary used in relation to your investment
Insurance – general, contents and landlord protection.
Advertising
Bank charges
Inspection reports
And most other items for which you pay cash
(or its equivalent) in relation to your investment properties.
b. The second category of claim is – Non cash items. These are the deductible items you do not actually pay cash for during the year, these include things like:

Depreciation on chattels.
(This is a big one and it’s one that many investors do not optimise).
It is a good idea to have a quantity surveyor complete a report for your accountant on all of the depreciable items in the property.

Roy Weston recommend the services of:
Merrifield Wilde & Woollard quantity surveyers

Floor coverings, cupboards, exhaust fans, hot water units, window treatments, light fittings are some examples of depreciable items but there are many more.

Depreciation on the construction.
All residential investment properties built after the 1985 budget was introduced, include a depreciation allowance on the construction costs. This is a substantial and legitimate claim and you should ensure your accountant includes it when compiling your tax return.

Although you may be doing your own tax return at the moment, once you begin to build your investment portfolio it is advisable to use the services of a specialist property investment accountant. His or her charges are also a tax claim.