Being a landlord is an attractive proposition. You can take out a home loan for an investment property, use the rental income to repay the home loan. You can then use whatever’s left for further investments.
But did you know there are many tax benefits attached to being a landlord? Many investors miss out on some crucial deductions because they complete their tax returns themselves and they don’t stop to ask, “What tax deductions can I claim?”
An accountant can help to answer this for you – but it’s also a good idea to research these deductions for yourself. Doing so ensures you can provide your accountant with all of the information they need to minimise your tax bill.
Property investment is tax effective in Australia thanks to tax breaks like negative gearing and many claimable deductions.
If you are a landlord, you are eligible for a number of deductions on your rental property at tax time.
You can claim two key types of deductions:
The Australian Taxation Office (ATO) provides a full list of the expenses landlords can claim on their tax returns. But here are some common tax deductions for landlords.
Rental advertising and marketing costs
Property agent fees and costs
Any expenses related to borrowing/financing your investment
Rental property maintenance, bills, and utilities
You will generally need receipts related when claiming these expenses at tax time. A tax agent can help you navigate tax deductions for your investment property.
It’s important that you know what you can’t claim for, especially if you complete your own tax returns. This ensures you won’t make any unwarranted claims that could cause issues with the ATO.
You can’t claim for:
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