Maximise your deductions on investment properties

With the end of the tax year approaching now is the ideal time to review your property investments and to look for ways to maximise your investment deductions in this tax year.

Deductions are generally allowable on investment property expenses such as interest, rates, body corporate fees, commissions paid, repairs and general maintenance. In short, most of your outward cash expenditure made to sustain the investment is deductable. Bring forward expenses such as repairs prior to the end of the financial year, will result in additional tax savings this year.

Other deductions may also be made for depreciation on assets greater than $300 and certain other expenses; these are written off over a period of time.

Some items such as principal payments are not tax deductable and other items such as renovations can assist your future tax position although they are not an immediate deduction. These items are added to your cost base of the property and are offset in your capital gains calculations when you sell at a later date.

If you have not already, consider having a quantity surveyor prepare a detailed report on your property. You may be pleasantly surprised what he uncovers to maximise your tax claim!

I recommend you check with your professional financial advisor/accountant to see what (if any) extra deductions you may be able to claim in this financial year and how your investment is performing for you overall.