Relevant tax deductions are one of the most important things to consider when trying to maximise your investment’s profit potential.

As a landlord, you can claim the following rental property expenses as an immediate deduction:

• Office Supplies – pens, stationery, envelopes, computer equipment etc that is directly used for the administration side of the property.

• Security – whether that be an alarm system or 24 hour security guard

• Painting, oiling, brushing or cleaning an item otherwise in good working order

• Evicting a non-paying tenant

• Interest on a loan to buy a depreciating asset for the property (e.g. a heater); finance renovations, such as a new kitchen or make maintenance repairs.

For a complete list of eligible tax deductions relating to rental properties visit www.ato.gov.au or speak to a qualified tax accountant.

QUESTION: I own an investment property and we are about to see our accountant for the first time regarding our tax returns. What should I take with me?

ANSWER: It is important that you supply your accountant with detailed lists of all your income and expenses from the property, whether they be cash or non-cash expenses:

• Cash expenses are expenses that are paid for in cash throughout the year like management fees and repairs.

• Non-cash Expenses are items which you can legally depreciate such as the actual building and fit out of the building.

For each investment property you own you will need to keep a separate folder to collate all your records.

• The address of the property

• The date of purchase of the property (preferably a copy of the contract)

• A copy of the depreciation schedule

• The purchase price of the property

• The total income of the property (rental income)

• The total expenses incurred with all receipts

• A copy of your bank statement so your accountant can calculate the interest cost

• A diary of any travel expenses incurred relating to the property with receipts

• A list of any questions you may have of your Accountant

QUESTION: I am planning to purchase my first investment property. I know I can claim many of the borrowing expenses, but what about the acquisition costs?

ANSWER: You cannot claim a deduction for the costs of acquiring or disposing of your rental property.
These types of expenses are capital in nature and go to the cost of the property and include:

• conveyance costs;

• advertising;

• agent commission;

• legal fees and stamp duty on the purchase and sale and

• travel expenses.

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