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The latest statistics released from the Australian Taxation Office reveal how much investors claim at tax time. BMT Tax Depreciation has analysed the data and found the top five.
1. Interest repayments
It comes with no surprise that interest repayments sits at the top of the list. A mortgage is a big commitment, and interest repayments rack up to the thousands of dollars. Even though interest repayments are an ongoing expense, it can be claimed as a yearly deduction. Depending on the size of the loan and interest rates, this can produce thousands of dollars in deductions each year.
2. Property depreciation
Property depreciation is the second highest deduction for investors across the country. Depreciation can be claimed on both the structural component of the investment property (capital works) and on the easily removable assets (plant and equipment). Depreciation is unique to any other as it’s a non-cash deduction. This means you don’t need to spend any money to claim it.
3. Body corporate fees
Investment properties in strata complexes are popular choices among investors as they are easy to maintain. Body corporate fees are a compulsory part of owning a property within a strata. These fees cover everything from insurance, common area maintenance and building repairs. However, unlike owner-occupied properties within the strata, you can claim all body corporate fees as a tax deduction each year.
4. Land tax
This tax applies to every property in the country. The amount of tax payable is dependant on the value of the land, and State or Territory it’s located in. Land tax is usually paid at the end of the calendar year, so its key that your clients record it for tax time.
5. Property agent fees and commissions
We all know that when an investment property is managed by a professional, it makes your life easier. Any fees associated with our services are 100 per cent tax deductible in the year they are paid.
To learn more about depreciation, contact BMT on 1300 728 726 or visit their website here.
If you'd like to know more about our Property Management Team get in touch here.