RENTAL PROPERTY DEDUCTIONS TARGETED

As the go-to Tax Accountant Hobart trusts, Hills Accounting has noticed something crucial that could affect rental property owners at tax time.

The Australian Taxation Office (ATO) is sharpening its focus on rental property deductions. It’s an area where errors are all too common, and this time around, the ATO is implementing stricter checks and enhancing their data-matching capabilities to better identify discrepancies.

Your Essential Rental Property Deduction Checklist

Owning a rental property can offer a variety of deductible expenses that reduce your taxable income. Some of the most common deductions include:

Interest on your mortgage: If you borrowed money to buy your rental property, the interest you pay could be deductible, but the repayments are not.

Depreciation: Over time, your property and the things inside it wear out (like new appliances or carpets). You might be able to claim this loss in value as a deduction.

Repairs and maintenance: Immediate deductions can be claimed for repairs that relate directly to wear and tear or other damage that occurred as a result of renting out the property.

Property management fees: If you’re not managing the rental yourself, the fees you pay someone else to do it are deductible.

Council rates, land taxes, and strata fees: Ongoing costs associated with owning your property may also be claimable.

It’s important to remember that not all expenses can be deducted immediately, and with the ATO’s intensified focus, it’s vital to ensure your claims are accurate.

Why the ATO Is Focused on Rental Deductions

With this increased focus on rental property deductions due to a high incidence of incorrect claims, property owners need to be sure that they do not mistakenly or deliberately claim excessive deductions, or fail to declare rental income. This heightened scrutiny means that maintaining accurate records and ensuring your claims are legitimate is more important than ever.

Tips for Compliant and Efficient Deduction Claims

Keep Detailed Records: From the moment you purchase your property, maintain thorough records of all expenses, including receipts, bank statements, and documentation of agent fees.
Understand What’s Deductible: Regularly review what expenses are legally deductible. Avoid the common mistake of claiming initial repairs or capital improvements as immediate deductions.
Use a Depreciation Schedule: Consider hiring a quantity surveyor to create a depreciation schedule. This will ensure you maximise your claim on the depreciating assets within your property. Of course, at Hills Accounting Hobart, we can help you with that.
Consult Professionals: Engage with a knowledgeable accountant who specialises in property investments. Hills Accounting can provide expert advice tailored to your specific situation, helping you navigate the complexities of tax deductions.

How Hills Accounting Can Assist You

Tax rules can be complex, but that's where we excel. Whether you’re a seasoned investor or new to property rental, Hills Accounting provides personalised advice to ensure your investment is both profitable and compliant.

As the Tax Accountant Hobart trusts, we are here to help you sort out your deductions, understand the rules, and ensure your tax filings are accurate. We’re also on top of the latest ATO guidelines to keep you prepared and up-to-date.

For more information or to schedule a consultation, contact Hills Accounting today. Email us at admin@hillsaccounting.com.au or call us on 03 62737800

Together, we can ensure that your investment is as profitable and compliant as possible.