Real Estatements – Rental Tax Deduction

Welcome to my latest “Realestatement” column. On a regular basis, I
look forward to providing answers to any questions you may have about
real estate. Whether you are in the process of selling or buying a property or
maybe you are a landlord, I look forward to answering your questions. In this
third column we will examine a question I often get asked by property investors
after June 30 has passed us by:

What type of tax deductions can an owner of a rental property claim
at tax time?

Now in a column of this size, there is only enough room to make two
suggestions as to what you may be able to claim. However, some of this
information may or may not apply to your circumstances, so before taking any
action seek sound financial advice from your accountant.

1. Repairs
In general, repairs include restoring worn or broken items to their previous
condition and include property maintenance like plumbing repairs, painting
flaking paint or replacing a broken door or window. Make sure you carry out
repairs when the property is rented (or available for rent), and not partially used
for private purposes, to gain the full deduction.

2. Other deductible expenses
You are entitled to claim deductions for the cost of travel to inspect your property,
repair it or collect rents. Even if you don’t have receipts or a log of your journeys,
you can still claim using the kilometre method at around 60 cents per km depending
on the size of your car’s motor, up to a 5000 km limit.

You may also be entitled to claim 26 cents per hour for home electricity and
phone bills incurred in relation to gaining your rental income. Itemised phone
accounts make it easy to keep track of calls, especially if your rental property
involves STD calls, and you can substantiate other expenses by keeping a diary
for one month.