Each year, it is often necessary that property management and property maintenance expenses will come up. But that doesn’t mean you can’t maxmise your tax benefits at the same time! According to the ATO, here are the property-related expenses that you may be able to claim on your tax return. 

 

 

Expenses you can claim an immediate deduction on for the financial year:  

• Advertising for tenants
• Body corporate fees and charges
• Council rates
• Water charges
• Land tax
• Cleaning
• Gardening and lawn mowing
• Pest control
• Insurance (building, contents, public liability, loss of rent)
• Interest expenses
• Pre-paid expenses
• Property agent's fees and commission
• Repairs and maintenance
• Legal expenses

It’s important to note that you can only claim these deductions on your tax return if they were incurred during the financial year, and were not paid by your tenant. Here is a list from the ATO website of expenses that you are not allowed to claim. 

What you can’t claim on your tax return as a Property Investor:  

• Expenses not actually paid by you, such as water or electricity charges paid by your tenants
• Acquisition and disposal costs, including the purchase cost, conveyancing and property advertising costs and stamp duty on the title transfer outside the ACT (instead, these are usually included in the property's cost base, which would reduce any capital gains tax when you sell the property)
• GST credits for anything you purchase to lease the premises – GST doesn't apply to residential rental properties, however, when claiming the expense as a deduction, you claim the total amount you've paid (inclusive of GST, if applicable).

 

In the lead-up to the EOFY, here’s a guide for what to focus on:  

 

• Arranging for any repairs and maintenance to be completed
• Finalising any large improvements
• Claiming your property insurance costs
• Prepaying insurance and other policy costs
• Claiming interest on your loan

Our suggestions for repair and maintenance work you should consider getting completed, include: 

• Arranging for the pruning/tidying of the garden, including mulching
• The servicing or repair of the sprinkler system, especially as the heavy rainfall of the wet season has stopped and the grass is starting to turn a little brown
• Adding any upgrades to the pool, as it's likely to get much less use over the coming months
• Servicing your air conditioner - it will have been running during most of the wet season and now is the perfect time to get it serviced, and not wait until September when the first signs of the build-up hit
• Adding small upgrades such as replacing light switches, fans, and toilets

 

Some final advice from us: 

If you’re a landlord with Absolute and want to know more from our knowledgeable and highly experienced team, you can reach out to your Property Manager at (08) 8930 6600), or get in touch here to discuss property expenses and contractors. Resources from the ATO on rental expenses and claiming at tax time can also be found here.