Minimise Your Tax Through Property Investments

Effective tax planning for your property investments can help you improve your tax position.

Working in conjunction with our team of accountants, we can help you plan different investment strategies to help you grow your wealth while minimising your tax dues, legally.

Investment Property Tax Benefits for Australians

As a property investor, you have the legal right to organise your finances maximise your profits and minimise your payables, including tax dues.

Here are some examples of property tax benefits for Australians:

  • Negative gearing can be designed to created deductions in taxable income
  • The interest of an investment property loan can be 100% tax-deductible
  • The depreciation of your fixtures and fittings can be calculated to help in reducing annual tax

However, most of these tax benefits are not automatically applied, which means you have to properly document property transactions and file claims in the Australian Taxation Office (ATO) before you can legally tax deductions.

At TENX Wealth, we have a team of accountants and tax specialists who can help you not only in effective tax planning but also in preparing the paperwork and even assist you in filing tax claims. 

3. Maintenance and Acquisition Costs - You can deduct expenses related to your rental properties such as: 

  • Bank charges on your investment mortgage
  • Bank charges on your investment mortgage
  • Marketing costs to find tenants
  • Association Fee
  • Cleaning Expenses 
  • Council Rates
  • Insurance 
  • Unpaid bills left by tenant
  • Legal Expenses
  • Property Manager Fees 
  • Repairs and Maintenance Costs 
  • Inspection Fees

List of Investment Property Tax Deductions You Can Claim

Property investors in Australia may be entitled to the following tax deductions:

1. Depreciation Allowances - You can offset depreciation cost on new purchases including fittings and fixtures in your rental property such as: 

  • Heating system 
  • Carpets
  • Furniture
  • Blinds 
  • Appliances

2. Negative Gearing - You may reduce your tax liability if the ongoing cost of maintaining your property is higher than your income

Tax Minimisation vs Tax Avoidance

There’s a big difference between tax minimisation and tax avoidance.

Tax minimisation refers to the legal and ethical use of existing Australian tax laws to reduce your personal or business tax dues.

The tax savings can be used to further grow your property business or invest in other instruments.

On the other hand, tax avoidance involves illegal strategies including non-disclosure of income that you have earned as cash wages or even rental income.

It is best to consult a tax accountant to carefully plan your taxation and properly take advantage of available tax benefits without breaking the rules.

Frequently Asked Questions

Can you write off property taxes 2020?

Through tax minimisation, you can practically write off part of your property taxes.

You may apply for property tax deductions to offset maintenance and acquisition costs, depreciation allowances, and negative gearing.

It is ideal to work with your accountant to identify your eligibility for specific deductions.

How does property tax deduction work?

You may file a claim to immediately minimise your tax against your current year’s income for your expenses incurred in property management and maintenance.

Take note that you can only claim a deduction for your property expenses if you can present documents to prove that you incurred them, and they are not paid by your tenant.

You may be allowed full deduction of rental expenses if your property is negatively geared.

Note: The information presented here should be used as a general guide only and not as a financial advice. Please visit the Australian Tax Office (ATO) website for complete details or work with a tax accountant for professional guidance.

What expenses can you claim for rental property?

Rental business owners can minimise their taxes by claiming an immediate tax deduction for the expenses related to maintenance and management of the property, which includes loan interests.

Here are the expenses that you can claim for your rental property:

  • Advertising costs
  • Council fees
  • Land tax
  • Gardening fees
  • Insurance 
  • Property agent’s commission
  • Property repair and maintenance
  • Some legal expenses
  • Body corporate fees
  • Water charges
  • Cleaning costs
  • Pest control

Note: The information presented here should be used as a general guide only and not as a financial advice. Please visit the Australian Tax Office (ATO) website for complete details or work with a tax accountant for professional guidance.

Can I claim my rental property as a business?

Yes, a rental property is considered as a business in Australia. Therefore, you will need to keep records and meet your tax obligations.

But the situation may be different if you are a co-owner of an investment property, in which you may be regarded as an investor instead of being an owner of a rental business.

It is best to review your rental property documents with an investment advisor to understand your current setup or choose the most suitable arrangement for your investment property.

Talk to a Property Investment Advisor Today 

TENX Wealth has a team of property investment advisors who can help you develop a property taxation plan that is fully compliant with state and local laws in Australia.