What Investment Property Tax Deductions Can I Claim for 2023-2024?

1. Professional Services

• Accounting and Bookkeeping: Deduct fees paid for accounting, bookkeeping, or property management software.
• Property Management Fees: Includes costs for advertising, leasing, and managing your property. Request a year-end statement from your property manager if not automatically provided.
• Lease Preparation: Expenses for registering or stamping a lease are deductible.
• Legal Services: Covers fees for recovering unpaid rent or addressing property disputes.
• Quantity Surveyor Fees: Fees paid for preparing a tax depreciation schedule are also deductible.

2. Finance and Borrowing Costs

• Bank Charges: Fees from accounts used for rent collection or property expenses are deductible.
• Borrowing Costs: Includes expenses such as valuation fees, search fees, and broker commissions. These are typically amortised over multiple years.
• Loan Interest: Deduct interest payments on loans specifically for investment properties.
• Mortgage Discharge Fees: Penalty fees for early repayments can be claimed.
• Prepayments: Costs under £1,000 covering a period of fewer than 12 months can usually be claimed upfront.

3. Insurance Premiums

• Property Insurance: Deduct premiums for building, landlord, and liability insurance.
• Mortgage Insurance: Treated as a borrowing expense and deductible over several years.

4. Repairs and Maintenance

• Repairs: Claim expenses for restoring your property to its original condition, such as fixing leaks or replacing broken fixtures.
• Maintenance: Routine upkeep such as cleaning, pest control, and garden maintenance is deductible.

📝 Note: Repairs made before leasing the property are classified as capital improvements and must be claimed through depreciation.

5. Property Inclusions and Utilities

• Paid Inclusions: Deduct costs for security systems, video systems, and furnishings in a rental property.
• Utilities: Expenses for water, electricity, and gas not covered by tenants can be claimed.

6. Depreciation and Building Write-Offs

• Division 43 – Building Write-Off: Deduct construction costs of structural elements at 2.5% annually for buildings constructed post-1987 or recently renovated.
• Division 40 – Plant and Equipment Depreciation: Claim for removable assets such as appliances, blinds, and carpets.

📢 Important Update: Depreciation rules vary by purchase date:

• Residential Properties rented before 9 May 2017 can claim both new and second-hand assets.
• Residential Properties purchased after this date can only claim newly installed assets.

For detailed guidance, contact TDQS at 02 5502 5500 or email info@tdqs.com.au.

7. General Holding Costs

• Land Tax: Deduct land tax paid on your investment property.
• Body Corporate Fees: Standard fees are deductible, while special levies for capital improvements are not.
• Administrative Costs: Includes expenses for stationery, telephone, and internet services.

Essential Documents for Tax Time

Organise these documents for a hassle-free tax preparation:

• Bank statements for property-related accounts
• Property manager’s income and expense summary
• Rates notices
• Receipts for all property-related expenses
• Insurance premium details
• Tax depreciation schedule from your quantity surveyor

Maximise Your Deductions with TDQS

At TDQS, we collaborate with experienced property accountants nationwide. If you’re unsure about specific deductions, we’re here to assist. Call us at 02 5502 5500 for expert advice or recommendations.

FAQs

1. How Can I Order a Depreciation Schedule?
   Simply call us at 02 5502 5500 or complete an online form for a personalised quote.

2. What’s the Turnaround Time?
We offer some of the fastest turnaround times in the industry, delivering schedules within 5 working days after inspection.