What Investment Property Tax Deductions Can I Claim?

Q: How Do I Claim Deductions On Investment Property?

The ATO is cracking down on tax returns and going through documents with a fine-toothed comb looking for incorrect claims. Do not make any fraudulent or misleading claims on your return, as this is illegal and can lead to huge fines and more. If you cannot prove the deduction, do not claim it. Thats why its important to keep all the relevant invoices, receipts, bank statements and proof of advertisements in rental listings. Keep a record of rental income and expenses for at least five years. These records can be either physical or digital. If youre in doubt, contact the ATO or a qualified accountant so you can minimise the taxes on your investment portfolio.

Q: Is The Interest On A Home Equity Loan Tax Deductible For Rental Property?

No. You cannot claim for borrowing costs if youve borrowed against the equity for personal use.

Q: Is Investment Property Tax Deductible?

Yes, you can claim tax deductions on related expenses if the property is rented out or is genuinely available for rent. These deductions can be claimed either immediately (against your current years taxable income) or over a number of years.

Q: Is Stamp Duty A Tax Deduction On An Investment Property?

No, you cannot claim a deduction for the cost of stamp duty on your investment property.

Q: How Do I Avoid Paying CGT On Rental Property?

When you sell an investment property, you either make a capital gain or incur a capital loss. Capital gains tax (CGT) applies to investment properties bought after 19 September 1985. A capital gain is when the proceeds from the sale of the property are more than the cost of owning the property. On the other hand, a capital loss is when the cost of owning the property is more than the proceeds from the sale of the property. The sale of your family home or principal place of residence is usually tax-free. However, for the sale of an investment property, capital gains tax is applicable. CGT applies to the property on the date you sign the contract of sale. You must declare the profit or loss from the sale on your tax return in the year it took place. While an investment property is not exempt from CGT, you can minimse the amount you pay. If you hold your investment property for more than 12 months, you pay CGT on only half of the gross capital gain.

Q: How Does Negative Gearing Work?

Negative gearing is when the costs of your investment property, plus any interest you pay, is more than the rental income youre making during the year. Property investors favour negative gearing as a strategy because the net loss is deductible from their taxable income. You will have to pay taxes on your rental income if your investment property is positively geared.

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Frequently Asked Questions

Can I Claim Deductions For The Cost Of Holding Land?

No, you cannot claim deductions for the cost of holding vacant land as a property investor. The ATO states that the land is considered vacant when:

There is no substantial permanent structure
There are ongoing renovations on a substantial structure, during which it cannot be rented or occupied.

There are some exceptions to this. Visit the ATO’s website for more information.

How Do I Claim Deductions On Investment Property?

Is The Interest On A Home Equity Loan Tax Deductible For Rental Property?

Is Investment Property Tax Deductible?

Is Stamp Duty A Tax Deduction On An Investment Property?

How Do I Avoid Paying CGT On Rental Property?

How Does Negative Gearing Work?

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Which Investment Property Expenses Are Tax Deductible?

Frequently Asked Questions

Can I Claim Deductions For The Cost Of Holding Land?

How Do I Claim Deductions On Investment Property?

Is The Interest On A Home Equity Loan Tax Deductible For Rental Property?

Is Investment Property Tax Deductible?

Is Stamp Duty A Tax Deduction On An Investment Property?

How Do I Avoid Paying CGT On Rental Property?

How Does Negative Gearing Work?

Still need answers? We're here to help!

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Which Investment Property Expenses Are Tax Deductible?

Frequently Asked Questions

Can I Claim Deductions For The Cost Of Holding Land?

How Do I Claim Deductions On Investment Property?

Is The Interest On A Home Equity Loan Tax Deductible For Rental Property?

Is Investment Property Tax Deductible?

Is Stamp Duty A Tax Deduction On An Investment Property?

How Do I Avoid Paying CGT On Rental Property?

How Does Negative Gearing Work?

Still need answers? We're here to help!

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