While there are just a few weeks to go until the end of the financial year on June 30, it’s not too late to get to grips with those rental property expenses you’re entitled to claim.
If you don’t have a depreciation schedule, put that to the top of your list. Shockingly, almost 50% of landlords fail to make depreciation claims, despite it being one of the most valuable tax strategies and could save you thousands of dollars annually.
A depreciation schedule is a report, produced by a quantity surveyor such as BMT Tax Depreciation, which outlines the cost of wear and tear to items such as carpets, blinds, stoves and even light fittings depending on their age. Indeed, landlords can claim between 10% and 20% against the values of a variety of depreciable items, and sometimes more, and in many cases, 2.5% of the building cost of the investment property on an annual basis, potentially saving you thousands of dollars.
Depreciation schedules will cost you between $600 to $800. However, the full cost of the schedule can be claimed back in your tax return.
Inspections and market conditions
Before June 30, make sure to inspect your property. Keep an eye out for any damage to the property and try to spot any potential long-term deterioration e.g., bannisters and balconies, as these could end up setting you back more money down the line.
Also, revisit the annual rent and tenancy agreement before the end of the financial year and consider reviewing rent if appropriate to market conditions.
If applicable, attend the annual general meeting for strata properties. This can give you an understanding of imminent strata expenses, which you can factor into your EOFY accounting.
Other expenses you might be able to claim include advertising for tenants and lease costs, bank fees, body corporate fees, cleaning, council rates, electricity, gas and water charges, gardening and lawn mowing. It’s also possible to claim the cost of building, contents, and public liability insurance, according to Etax Accountants. Other expenses you should seek to claim include interest on loans, land tax, and legal costs related to managing the property. There is also pest control, and for a complete list of the expenses, you should be claiming, be sure to talk to your accountant.