End of Year Tax Considerations – Rental Properties  

For today’s blog piece, we welcome Jeanette Niebling from TJN Accountants as our guest blogger. Jeanette has outlined some ways that we can minimise our tax bills in relation to rental properties. Please find Jeanette’s contact details later in the post so that you can make contact if you have specific questions. If you would like electrical help with your rental property, please contact us on 07 55736908!

With the end of the financial year rapidly approaching, now is the time to start taking action to minimise your tax bill.  If you have a rental property, there are a number of things you can do before 30 June to help reduce your tax liability.  If you have any expenses coming up for your rental property in the next few months, we recommend trying to pay these expenses prior to 30 June – this will bring the deduction into the current tax year and will help you to reduce your 2019 tax bill.

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Below is a list of the most common deductions associated with rental properties: 

  • Rental agents fees and commissions

  • Advertising for tenants

  • Body corporate fees and charges

  • Borrowing expenses 

  • Council rates and water charges

  • Cleaning

  • Depreciation

  • Gardening and lawn mowing 

  • Loan interest

  • Insurance (both house insurance and landlords insurance)

  • Land tax

  • Pest control

  • Repairs and maintenance 

It is important that you keep receipts for all of the costs incurred for your rental property.  

Depreciation

For your rental property, you may be able to claim a deduction for the depreciation of both the property and its fittings.  However, the rules around this have recently changed so it is important to get advice before lodging your return.

In order to claim depreciation of the building and its fittings, you will generally need a depreciation schedule prepared by a quantity surveyor.  If you obtain this report prior to 30 June, the cost of the report will also be deductible in the current financial year. 

Repairs 

Does your rental property need a some repairs?  Consider undertaking these repairs prior to 30 June and claiming the deduction this financial year.  Talk to your agent about the current state of the property and whether there are any repairs that might be needed.

Some of the general repairs and maintenance items you could consider include:

  • Repainting

  • Servicing of larger assets – including air-conditioning units, pool filters, hot water systems, smoke alarms

  • Replacement of older, worn assets – for example, air-conditioning units, kitchen appliances, pool equipment

  • Upgrading the existing assets – for example, swapping standard power points for USB powerpoints, converting existing lighting to energy efficient lighting

 

Travel

Also, a reminder that you can no longer claim a deduction for travel to or from your rental property.

Rental tax deductions 1

If you would like to discuss other strategies for minimising your tax liability, please do not hesitate to contact Jeanette Niebling, Principal at TJN Accountants (56656469 or jeanette@tjnaccountants.com.au).

Disclaimer: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts responsibility for any loss, howsoever caused, as a result of reliance on this general information.We recommend that our formal advice be sought before acting in any of the areas.