What can be deducted at tax time from investment property?
There's more than one way to make money. While capital gains are an incredibly beneficial part of buying a new property and renting it out, it isn't the only way you can see fantastic financial growth. In fact, did you know that when you file your taxes, you can develop ways to get tax deductions on investment property that can potentially save you thousands?
Making a great investment property strategy isn't just about selecting a great home in Queensland: It's also about saving and making money where you can.
So where can you save?
If you own a rental property in Queensland, you can make a number of deductions against your taxable income every year. This includes the costs of property maintenance, bank fees, insurance - even the cost of mowing the lawns!
Of course, you can only make these claims for periods during which your real estate is inhabited by tenants, or you are advertising for them. But by applying a canny property investment strategy that includes the full range of deductions available to you, it's possible to further boost your profits. Everyone loves a little extra in their pocket, so don't leave any stones unturned!
Don't neglect depreciation
In Queensland, just as anywhere else, houses are going to age over time. Wear and tear is natural, and it also affords you another way of making money off your investment property. This comes in two forms: The bricks and mortar of the house itself, and also the facilities within, like washing machines or stoves.
By engaging a Quantity Surveyor to draw up a depreciation schedule, you could claim back tax deductions on your investment property as it depreciates in value. This is a common part of owning investment property, but still one that many people don't take advantage of.
Have your cake and eat it
Investing in Queensland property isn't a get-rich quick scheme. It's something that takes a great deal of patience and planning, as well as the guidance of the appropriate professionals. Done right, it can yield excellent capital gains in the long term.
However, this doesn't preclude you from being able to enjoy some short term benefits. The Australian Taxation Office lists a wide range of deductions that can be claimed from investment properties, and it could be worthwhile investigating this to see what you can get.
When it comes to developing a strategy itself, or for help selecting an ideal property, you can always come and talk to the wealth coaching team here at Think Money.