Tax Tips: Property Investors

Property investors, now is the time to gather your records and review your expenses for the 2023 financial year.

Income to Declare

All income earned from each property must be declared. If you have multiple properties, keep the records for each property separate to make the tax return more efficient.

Rent received; whether paid directly to you, through an agent, or an online management platform. Rent includes regular recurring amounts and any lump sum amounts paid in advance.
Rental bonds returned; for example, if the tenant caused damage or defaulted on rent payment.
Insurance payouts; received as compensation.
Expenses reimbursed by the tenant; for example, if they have caused damage and you have paid for the cost of fixing the damages, or if they have reimbursed you for water.
Extra fees received; for example, letting or booking fees.
Government rebates; for example, for the installation of solar utilities.

You will need statements or recipient-created tax invoices from agents or management platforms and documents for all other payments received.

Tax Deductions

Deductible expenses for the property are different for residential and commercial properties. Not all expenses related to owning a property are allowed as deductions, so it’s important to check what you can claim.

Expenses You May be Able to Claim This Year

Advertising for tenants
Body corporate fees
Council rates
Water supply charges
Land tax
Cleaning, gardening, pest control, and property maintenance
Insurance
Agent fees
Repairs and maintenance
Some legal expenses
Loan interest

Other Expenses

Some expenses need to be claimed over a more extended period, such as several years or decades. These may include borrowing expenses, capital expenditure, depreciation, initial repairs, and capital works.

Some expenses cannot be claimed. These include stamp duty, loans and repayments, some legal expenses and insurance premiums.

Get Help to Simplify Your Property Records

Tax matters for property investors can be complex. The ATO keeps a close eye on tax returns that involve property investment, as it’s easy to make mistakes. Other matters to consider include the period of rental availability, private use of the property, capital gains tax, legal contracts, and positive or negative gearing.

We’d love to help ensure you claim the right deductions to make the most of your investment property this year and beyond.

Book a time now for your 2023 tax return.