Guide to Claiming Tax on Your Investment Property

The Australian Tax Office (ATO) revealed that nearly two thirds of Australia’s homeowners are reporting a tax loss on investment properties at a cost of $1.3 billion.

Property investment taxes are complex and the ATO uses a complicated set of calculations to ensure that you are not over-claiming on your tax return. No one will ever tell you if you have under-claimed though, so it’s important to get your calculations right the first time.

Here are some things to watch out for so that the ATO doesn’t catch you out:

  • Don’t claim improvements as repairs because they are not the same thing. You can claim a return for repairs, but an improvement is an investment.
  • Depreciation will apply to everything except the land value, so you will need to factor this in.
  • The building cost can be included in your return and a $200,000 home can easily offer $5,000 in returns.

The cost of travelling to your property to maintain it can be claimed, but if you are visiting for a holiday then the ATO will call you up on this.


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