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With the financial year about to end is there anything that you have been putting of doing at your investment property? By attending to maintenance prior to the end of the financial year you can claim the tax benefit immediately in your tax return. It may also help reduce your taxable income if needed. It is important to note that all work carried out on your investment property may not be an immediate 100% tax deduction.
Some maintenance, building renovations and improvements may not be considered a taxable expense – but a capital appreciation cost. You can claim a deduction for certain expenses you incur for the period your property is rented or is available for rent. However, you cannot claim expenses of a capital nature or private nature – although you may be able to claim decline in value deductions or capital works deductions for certain capital expenditure or include certain capital costs in the cost base of the property for capital gains tax (CGT) purposes.
Types of rental expenses There are three categories of rental expenses – those for which you:
· cannot claim deductions
· can claim an immediate deduction in the income year you incur the expense
· can claim deductions over a number of income years.