7 Ways To Maximise Your Rental Deductions
A negatively geared rental character is a great way to reduce your tax, but some do not take complete advantage of the tax deductions obtainable. I have compiled a list of seven ways to maximise your deductions and get the most out of your character:
Try and position an interest only loan on your rental character. If you have surplus cash you are best to pay down non-deductible debts not related to the character, such as home loans, credit cards, personal loans etc.
You can claim depreciation on a character, but this is something that very few people truly do. A quantity surveyor can produce a report which allows you to claim depreciation. This is such an effective tax deduction because you are not out of pocket for depreciation expenses. This is a major deduction, especially in new similarities, but so many people miss out on this.
Keep a folder where you keep up all your receipts once you have paid your expenses. This method you will not forget about the rates notice, or the times you had the lawns mowed, as the receipt will be in the folder when you visit your accountant at tax time.
Every dollar counts, already if you use $1 on a washer from the hardware store to fix a leaking sink you must keep that receipt because every dollar adds up.
fill with the theme of every dollar adds up make a log of every time you phone or post items to your estate agent or tenant, these items can also add up.
If you are making a repair to the character, please consult us before you go ahead with it. Some items may be classed as improvements and consequently be depreciated over its effective life, instead of written off in the year the expense was incurred. Did you know that replacing damaged polished floors with carpet would typically be classed as an improvement and make it depreciable?
Keep a log book of the times you travel to see your rental character. You should be able to claim this as a deduction. This deduction may have to be apportioned if part of your travel is for a holiday.
This is not an exhaustive list, but it can help you get the most out of your rental character. Always remember, if you are making any decisions and you are not sure if it will be deductible, call your accountant to discuss.