It's Tax Time. Here's Everything Property Investors Need To Get Right This Year.

The new financial year is here, and if you own an investment property, the next few months are when you either leave money on the table or make sure every dollar you are entitled to ends up back in your pocket. Most investors lodge a return and claim the obvious stuff. The ones building serious portfolios treat tax time as a strategy session, not an admin chore.

Want to know more about deductions? Keep reading below 👇

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This is your biggest deduction and the first thing your accountant should be looking at. Every dollar of interest you paid on your investment loan this year is claimable against your rental income. The trap most people miss is redrawing on their investment loan for personal spending. The moment you do that, that portion of the interest stops being deductible. Keep your investment loan clean and separate from everything else.

Think of depreciation as the ATO giving you a tax deduction for the natural wear and tear on your property, without you having to spend a cent. There are two parts to it. The first covers the building itself, and the second covers the fittings inside it, things like carpets, ovens, air conditioning, and hot water systems. To claim it properly you need a depreciation schedule from a quantity surveyor, which costs around $600 to $800 and typically unlocks thousands in deductions each year. If you do not have one, getting it sorted before you lodge your return is one of the best investments you can make this tax time.

This is the one that catches investors out most often. A repair is fixing something that is broken, restoring it to the condition it was in before. That is immediately deductible. An improvement is making something better than it was, and that needs to be depreciated over time. Replacing a cracked tap is a repair. Replacing the entire bathroom is an improvement. If you did any work on your property this year, go through it with your accountant before lodging, because the ATO is actively looking at this and getting it wrong is one of the most common triggers for a review.

Knowing what not to claim is just as important. Your loan repayments are not deductible, only the interest is. Any expenses for periods where your property sat vacant and was not genuinely available for rent cannot be claimed. If you used the property personally at any point, you need to apportion your expenses for those periods. And if there was damage to the property that existed before you purchased it and you paid to fix it, that is treated as a capital cost, not an immediate deduction.

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_{Disclaimer: The information provided in this article is for educational and informational purposes only. It is not intended as financial, legal, or professional advice. Always do your own research and consult with a qualified professional before making any decisions. The opinions expressed here are solely those of the speaker and do not reflect the opinions or views of any other organisation. By using this information, you agree that the creator of this content is not responsible for any financial or other losses you might incur.}