Investment Property Tax

Knowing how to handle investment property tax matters is crucial to maximising your property investment returns...

Investment property tax has a high level of return potential and if taken full advantage of can help property owners gain several tax credits. A commonly ignored technique of gaining tax credit is the use of investment property tax depreciation, which is obtainable to all property owners that report income from rent or have a business premises that is used in the earning process. If this is new to you, capital allowances and depreciation can be back claimed for 4 years, so you can still benefit today from your investment property tax benefits from years ago.

Many people involved in investment property are ignoring their tax credits by inefficiently calculating or completely ignoring the depreciation their property can bring them. Any property, no matter how old will depreciate at some degree, including things like flooring, light fittings, and air conditioning units. It must also be noted that if a property was built after July 1985 it can still report a construction write off allowance. Also outside extensions such as walls and fences, paving, or sheds and outhouse that were put in place after February 26, 1992 are eligible for a building write off allowance.

Depending on a building’s use, its age and original construction costs, depreciation value can differ a lot. To maximize you claim on investment property tax you’ll need great experience with construction costing and a deep understanding of income tax assessment. In the long run your learning of these skills will be very financially rewarding.

On top of depreciation there are several clever deductions you can make on your investment property tax. For example, if you have to travel a great distance to inspect your investment property, travel costs such as gas can be claimed back as part of the inspection process. This is strongly advised if you need to fly out to visit your investment property. A word of caution though, this can be tricky to claim for if the trip is treated as a holiday. In other words don’t take the whole family and spend 4 weeks on the beach.

With a little out of the box thinking, full research on depreciation and the maximization of deductions, you should be able to get the most out of your investment property tax. As they say, “make the taxman pay for your investment property,” so you can enjoy the profits.