Tax tips for property investors

Here is a list of tax tips for property investors:

1. Renovations by previous owner

Individuals may be eligible for a deduction for depreciation on the cost of improvement by a previous owner, provided items are identifiable and itemized in a depreciation schedule.

2. Repairs at time of purchase

Repairs made to the property are generally deductible provided they relate to wear and tear, but not repairs carried out within the initial 12 months of owning the property.

3. Prepay property expenses

Individuals may be able to prepay property expenses up to 12 months in advance.

Prepaid expenses are not automatically deductible. A review of eligible payments should be carried out.

4. Depreciation schedule

A depreciation schedule prepared by a qualified quantity surveyor outlines the deductions available on an investment property.

This can help to add a significant tax deduction for depreciation and also maximise an individual’s cash return. The cost of a depreciation schedule is tax deductible.

5. Travel expenses

Travelling to a property to inspect, carry out maintenance or collect rent may be able to be claimed as a tax deduction.

6. Keep receipts

It is important to keep all receipts to be able to prove deductions and show why the expense was incurred to derive assessable income.

7. Property data matching

The ATO uses data matching techniques, including monitoring property transaction details to target property investors ensuring the correct amount of tax is paid.