The Australian Property market is pushing forward despite the forecasts, the high sales prices and high rent usually lead to a higher tax bill. Here is some useful information to keep in mind when lodging your next Tax Return.
The tax time can be stressful and according to the ATO nine out of 10 property investors are getting things wrong. The real worry is that over 70% of property investors lodging through a tax agent
Real estate as a whole has a generous array of tax deductions that can reduce your tax burden and make it easier to own an investment property. In Order to really maximise the return from your property making a claim on all the available tax deductions to you is a must.
Many property investors do not claim depreciation, which can save you thousands of dollars in tax per year. Data released by the ATO last month shows just over 2 million Australians owned an investment property. More than 70% of those investors owned just one property.
We want to help you get everything right on your tax return this year, so here is a handy list of tips from the ATO regarding the expenses you can claim on your investment.

Expenses you can claim immediately

advertising for tenants
body corporate fees and charges
council rates
water charges
land tax
cleaning
gardening and lawn mowing
pest control
insurance (building, contents, public liability, loss of rent)
interest expenses (Remember, no deductions for principal payments!)
property agent’s fees and commission
repairs and maintenance
legal expenses.

Expenses that must be claimed over several years.

Borrowing expenses for an investment property loan Capital works, such as improvements (e.g., bathroom renovations or a new deck)

Negative gearing

Gearing is another way of saying “borrowing money to buy an asset”.
Negative gearing can be a tax strategy used by investors and describes when the income (i.e., the rent) made from an investment is less than the expenses it incurs, meaning it’s making a loss.
The record low interest rates in recent years have meant that many properties were positively geared. We are now returning to the long-term average of 7% to 7.5% mortgage rates, so there will be a return to negative gearing for many investors. This is the price investors pay while their property grows in value over time.

Finally, make sure you keep good records, and keep all your receipts for at least five years.
For more information, you can view the ATO’s Rental Properties guide.