Property Investors Tax Return Checklist
INCOME
Rental Property Summary Report from your Real Estate Agent
Details of any other income – including insurance payouts for damages, reimbursements from tenants, etc.
Capital Gains from the sale of a property – we’ll need copies of your purchase and sale contracts
DEDUCTIONS
IMMEDIATE DEDUCTIONS
You can claim these expenses immediately in your Tax Return.
Administration Expenses
Stationery used to maintain your rental records
Postage on documents relating to property management
Telephone calls relating to property management – Keep a diary record of these to satisfy the ATO
Legal expenses relating to debt collection or tenant problems
Electricity and gas – that are paid by you
Insurances
Landlords
Building
Contents
Public Liability
Property Agent Management
Fees/commissions – including GST
Postage
Statement fees and
Bank charges/fees
Lease document expenses
Letting fees
Property Management + Maintenance Expenses
Advertising for tenants – paid by you or paid by agent
Body Corporate fees or Strata Title fees and charges. Special levies for capital works on a building can only be depreciated at 2.5%
Cleaning
Gardening / Lawn Mowing
Pest control
Security patrol fees
Rates + Taxes
Water rates, charges and usage
Council rates
Land tax
Repairs + Maintenance
Repairs relating to wear and tear or damage because of renting out the property. They do not include repairs of any damage in existence at purchase. The expense is a repair when it is being restored. Generally, repairs include:
Plumbing
Electrical
Handyman
Be aware of the difference between repairs and improvements.
For example – fixing broken glass on a window is considered a repair. Replacing the whole window frame is an improvement which can only be depreciated at 2.5%.
Repairs made immediately after purchase of an investment property or maintenance to make the property suitable for rental are of a capital nature (initial repair). These form part of the cost of the property and can be depreciated but they are not immediately deductible.
Interest and Loan Account fees on loans to finance investment properties.
For the interest to be deductible, the loan must have been applied to acquire an income producing asset e.g. rental property.
Where loans are used for both an investment property and private assets, the interest has to be apportioned based on how much of the principal was used for which purpose. This usually happens when you use a Line of Credit facility.
Travel Expenses
Travel expenses for rent collection, inspections, repairs and maintenance are no longer allowed by the ATO as tax deductions.
Quantity Surveyor
Report showing depreciation expenses and Special Building Write-off
Seminars
Cost of attending property investment seminars – only to the extent that they relate to operating or maximising the return on currently owned properties
Where money is spent on relevant seminars before any property is acquired, there will be no deduction available
DEDUCTIBLE OVER A NUMBER OF YEARS
Borrowing Expenses
Deductible over the period of the loan where the loan is less than five years, or otherwise deductible over 5 years. Expenses deductible include:
Loan Application fee
Title search fees
Lenders Mortgage insurance
Stamp Duty on Mortgage
Mortgage registration fees
Depreciation on New Plant & Equipment
The ATO calls this “Decline in Value” of depreciating assets
The costs of installing any plant and equipment are also depreciated
Depreciation on the Building Construction
These are referred to by the ATO as “Capital Works” deduction
FOR PROPERTIES PURCHASED DURING THE YEAR
Settlement of Property Purchase – information on your Lawyer’s settlement letter
Balance of council rates
Balance of water rates
Balance of body corporate fees