When it comes to rental properties make sure you don’t fall for any of the common tax mistakes people fall for this year.

Here’s our top ten tips for you to ensure your claims are successful –

  1. Always keep evidence to support your claims, like your receipts.
  2. Make sure your property is genuinely available for rent, using it as a holiday home for a period of time each year affects what you can claim.
  3. Be aware that initial repairs and improvements CANNOT be claimed in full in the year the expenses are incurred.
  4. If you have borrowing expenses of more than $100 they must be claimed over five years.
  5. The costs of buying a property CANNOT be claimed as a deduction.
  6. You can only claim the interest component of a loan as a deduction for a loan that relates to your rental property.
  7. Capital works can be claimed at 2.5% of the cost for 40 years.
  8. You CANNOT claim deductions for periods when you’re using the property yourself.
  9. If you co-own then the income and expenses can only be claimed according to your legal ownership ie if you jointly own a property 50/50 with someone then you each claim 50% of both the income and expenses.
  10. When you sell your rental property be sure to work out if you make a capital gain or capital loss.

Bonus tip – remember that you can no longer claim travel expenses to your rental property.

If you have any other questions then contact our friendly office by phone or via email.