Common rental property deductions, the difference between repairs and improvements, and the records you need for a smooth tax return.
If your property is rented or genuinely available for rent, many ongoing costs are deductible in the year you pay them, including:
A repair fixes damage or wear, like replacing a broken tile, and is generally deductible straight away. An improvement makes the property better than it was, like a new kitchen, and is usually claimed over time as capital works or depreciation. Repairs to fix problems that existed when you bought the property are treated as part of the cost of the property, not a deduction.
Capital works deductions apply to the building itself, and some fittings can be depreciated. A quantity surveyor's depreciation schedule is often worth getting for newer properties.
Keep your loan statements, rental statements from your agent, receipts for every expense, and the purchase documents. You will need the purchase records again when you sell, for capital gains tax.
This article is general information only and does not take your personal circumstances into account. Talk to us before acting on it.
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