Investment property tax deductions

investment property tax deductions

Investment property tax deductions

If you have investments in property you can claim investment property tax deductions which are related to the expenses you spend as you own and maintain each property. Your rental profit that you make in your investment will be subjected to tax. By claiming the available tax deductions, you can reduce your rental profit and ultimately reduce your taxable income.

There are some references about claims that you can make to get property investment tax deductions. The most common one is the cost of advertising for tenants if your property is available for rent. These costs include: advertising with local real estate agencies, posting advertisements in newspapers or local publications, and posting notices at local shopping centers. Bank charges on your loan account are also tax deductible. Locate your bank statements to make sure total bank charges for an income year.

Borrowing expenses include loan establishment fees, title search fees, costs for preparing and filing mortgage documents, mortgage broker fees, stamp duty charges, valuation fees and mortgage insurance also make investment property tax deductions. You can claim a tax deduction for construction expenditure, or capital works.

The deduction is spread over 25 or 40 years depending on the type of construction and the year in which the construction was completed. The construction costs of a newly built property are deductible over 40 years. To maximize your investment property tax deductions you can obtain a quantity surveyor’s report which will list the year of construction, the construction costs, and the deductible amount each year.

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