Property Tax return - What can & can't i claim

Property Tax return - What can & can't I claim

What can I claim?

Capital or private expenses can’t be deducted from your rental income. Capital expenses are costs you incur to buy or increase the value of a capital asset.

The following expenses can be deducted from your rental income:

• Rates and insurance
• Interest paid on money borrowed to finance your property
• Agents fees and commission relating to the rental of the property
• Repairs and maintenance (except if they substantially improve the property)
• Motor vehicle and travel expenses
• Legal fees for arranging the mortgage or finance to buy the property
• Legal fees for buying and selling a property can be deducted. This is provided your total legal expenses for the income year, including the fees associated with buying and selling a property, are equal to or less than $10,000.
• Mortgage repayment insurance
• Accounting fees for the preparation of accounts (We will add this in)

What can't I claim?

Capital or private expenses can’t be deducted from your rental income. Capital expenses are costs you incur to buy or increase the value of a capital asset. Private expenses are incurred for your own benefit and are not connected with producing taxable income.

The following are non-deductible expenses:

• The purchase price of a rental property
• The capital part of any mortgage repayment(s)
• Interest on money which you borrow for some purpose other than financing the rental property, even if you use the rental property to secure such a loan
• Any repairs and maintenance that go beyond replacement and are in fact improvements to the property
• Real estate agent’s fees incurred as part of buying or selling the property
• The cost of making any additions or improvements to the property (Capital Improvements).
• Depreciation on the buildings from the 2011-2012 income year.

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