RENTAL PROPERTY TAX RETURN

Rental properties are considered a good investment and much less volatile when compared with shares or other investments. With Rental properties, you have the potential appreciation of a highly leveraged asset. Rental income is money in your pocket, and your tenants will amortise your mortgage for you. There are tax write-offs available for income properties. You are the boss and get to make all your own decisions involving your property.

A depreciation schedule is a document that advises how much depreciation (wear and tear costs) you can claim on your investment property. Depreciation often helps to reduce taxes significantly. If you do not have a depreciation schedule yet, call your local property appraiser as soon as possible to request a copy.

As long as the loan costs are greater than the rental income, then the Australian Taxation Office allows investors to offset the loss against their income. This strategy, known as negative gearing, is often considered more of a tax strategy than an investment due to the fact that it can lead to larger tax refunds.

From a taxation point of view, repair costs for fixing an existing air conditioner, for example, may be claimed in full in deductions immediately. While improvements like the installation of an air conditioner, are considered Capital Allowance and may only be claimed in deductions within specific years.