You can deduct certain expenses incurred during the time your property is rented or available for rent. You cannot, however, claim capital or private expenses (You may be able to claim depreciation or capital works deductions for certain capital expenditures, or include certain capital expenses in the cost base of the property for CGT purposes). Our tax accountant Melbourne will help individuals in comprehending the knowledge of rental expenses in Australia.
What are the Types of Rental Expenses?
It is suggested by tax agent Melbourne that people can divide their rental expenses into three categories, for which people:
- Cannot claim deductions
- Can claim an instant deduction in the income year you incur the expense
- Can claim deductions over several income years
EXPENSES FOR WHICH YOU CANNOT CLAIM DEDUCTIONS
Tax return accountant said that people cannot claim deductions for the following expenses:
- The property’s acquisition and disposal costs
- Expenses that you did not incur, like water or electricity usage fees paid by your tenants
- Expenses incurred during periods where your property (including your vacation home) was not available for rent.
- Expenses not related to the rental of a home, such as:
- Expenses associated with your personal use of a vacation home that you rent out for a portion of the year
- Maintenance costs for a non-producing property used as collateral for an investment loan
- Costs associated with holding vacant land
Other expenses for which you cannot claim a deduction include:
- Expenses for travelling to inspect a property before purchasing it
- Prior to renting, expenses incurred in relocating assets among rental properties
- Rental seminar costs to assist you in finding a rental property to invest in. For more information, you can acquire knowledge by searching tax accountant near me.
Acquisition and Disposal Costs
You cannot deduct costs associated with buying or selling your rental property, such as:
- Purchase cost of the property
- Fees on bank guarantees instead of deposits
- Conveyancing costs
- Advertising expenses
- Fees are charged by a buyer’s agent to locate a suitable rental property for you to purchase, including where the agent suggests a property manager as an optional or supplementary service.
- Stamp duty on the transfer of property (but not on the lease of property)
Deductions for Vacant Land
You can no longer claim deductions for holding vacant land for expenses incurred on or after July 1, 2019. This applies to land you owned prior to or after July 1, 2019.
Tax accountant Melbourne said that at the time you paid the expense, your land was considered vacant:
- There was no substantial and permanent structure on the land.
- The land had a substantial and permanent structure that was used for residential purposes, but the premises were not used.
You can still deduct the costs of holding vacant land.
- Corporate Tax Entity
- Superannuation Plan
- Managed Investment Trust
- Public Unit Trust
- Superannuation plans, managed investment trusts, and public unit trusts are all examples of unit partnerships or trusts with all members being corporate tax entities.
Tax return accountant said that the land is utilised to carry on a business by
- You
- Your affiliate or an entity of which you are an affiliate
- Your spouse or child under 18 years old
- An entity connected with you
You, an affiliate, a child or spouse, or an entity associated with you are operating a primary production business on land that is hired or leased to another entity.
You make land available to a business at arm’s length for use in that business.
Tax agent Melbourne said that the land had a substantial and permanent structure on it, but an exceptional circumstance caused it to become vacant.
EXPENSES FOR WHICH YOU CAN CLAIM AN IMMEDIATE DEDUCTION
Expenses that may be eligible for an immediate deduction in the income year in which they occur include:
- Advertising for Tenants
- Bank Charges
- Body Corporate Fees and Charges
- Cleaning
- Council Rates
- Electricity and Gas
- Gardening and Lawn Mowing
- In-House Audio and Video Service Charges
- Insurance
- Interest on Loans
- Land Tax
- Lease Document Expenses
- Legal Expenses
- Mortgage Discharge Expenses
- Pest Control
- Quantity Surveyor’s Fees
- Repairs and Maintenance
- Secretarial and Bookkeeping Fees
- Security Patrol Fees
- Servicing Costs Like Servicing a Water Heater
- Stationery and Postage
- Telephone Calls and Rental
- Tax-Related Expenses
- Car and Travel Expenses to the Extent that they are Deductible
- Water Charges
Final Say
We hope that you are fully equipped with the knowledge needed for the Rental Expenses in Australia. Accountant Melbourne provides professional accountants to individuals and businesses with better accounting services. If you want more knowledge regarding our services can take information by searching tax accountant near me.