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Property Development Finance

Investing in a Property? Do you know these Tax Deductions?

November 24, 2014

If you are planning to invest in a property or if you are already in to the investment game, it is good to update your property investing knowledge from time to time. Here are top four tax deductions that as an investor you are eligible for and must know about –

Maintenance Costs & Management Fees – When investing in a property, there are many maintenance costs associated such as repair of a leaking ceiling, fixing a broken pipe or tap these all expenses are usually a part of tax deduction. This means one can claim the costs of running your own home and office including rent, electricity, telephone, internet etc., till d extent you are using it for investing. In addition, any property investing subscriptions such as RP data, adviser’s fees, magazines are also deductible. The cost of day-to-day maintenance, improvement and other management fees are part of this.

Travel Expenses – Traveling expenses related to purchasing a property, for maintenance or inspection of a property can also be claimed especially in case of an inter-state investment. If you were not sure and have missed some of the claims in the past, you can take advice of an expert tax accountant with wide knowledge of property investment, he can surely help you in reimburse of deductions. In addition, if your broker, real estate agent are local even they you can claim expenses as cents per kilometre for property related travel.

Loan Interests & Borrowed Funds – Annual interest paid on the investment loan is tax deductible. In fact, experienced investors are aware about it that even the interest on all borrowed funds for investment property is also considered tax deductible be it for the stamp duty, legal fees, and deposit. However, for this you need lucid justification that funds were connected to the investment purchase. If you have borrowed funds from the bank as a home loan or from another property’s equity, just ensure that funds are for investment purpose, not private at all.

Depreciation – It is generally assumed that older properties do not have any depreciation value. However, any refurbishments or improvements made to the property since its construction can also depreciate. You can get a depreciation schedule prepared for you by an experienced accountant that can examine and catch all the depreciation available in your property.

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