3 rental property expenses you might not know you can claim at tax time
Buying property can be an expensive proposition – though it can have significant rewards for the well-informed investor. Because your rental properties act as a revenue stream, there are plenty of different things you can claim at tax time.
Could you have forgotten these deductions?
1) Travelling to the property
Petrol, taxis, even air fares can be claimed.
One of the duties that you may have as a landlord is ensuring that your property is well-maintained. Accidental damage, a burst pipe or just bad weather can all create issues for your tenant as well as yourself as the landlord. A stitch in time saves nine, or so they say, which is why acting quickly is paramount for the future efficiency of your investment.
In some cases, this requires travel – sometimes a lot of it. Petrol, taxis, even air fares can be claimed – but only so long as the purpose of your trip is specifically to inspect and/or repair that property. If you visit your rental property while you are on holiday, or example, you cannot claim the full costs; so keep that in mind when deciding to drop in for a quick checkup.
2) Borrowing expenses
Many property investors in Queensland will know about their ability to claim interest payments against tax, but did you know you can start claiming well before then? Depending on your situation, you may find yourself able to claim a multitude of mortgage start-up costs, such as title search fees, costs of mortgage documents or even loan establishment fees.
Furthermore, if the lender has requirements before approving your loan, such as a property valuation or mortgage insurance, you may be able to claim this as well. Deductions from the very start – just another reason why property is such a popular investment.
3) Legal fees
In the course of owning a property, you may find that legal action is required for one reason or another. In some cases, this can be a significant cost on your part, but thankfully you can also claim certain legal expenses against your income.
The costs of evicting a tenant or court action are good examples, but more common claims include the solicitor's fees for the preparation of loan documents, and other similar fees regarding the purchase of the property. Legal action can be a significant process to take, so it's good to know that at least the financial damage can be mitigated.
Investing in property has a multitude of tax benefits, but the best way to ensure you make the most of them is to keep the right people on your team. That's where the property mentors at Think Money can help. With years of experience in the property investment game, we can make sure you don't spend an extra cent than is necessary. Get in touch with us today.