ATO flags key focus areas for this tax time
Getting your rental property deductions right
Rental properties continue to remain in the ATO’s sights. ATO data shows that 9 out of 10 rental property owners are getting their income tax returns wrong.
This year, the ATO is particularly focused on claims that may have been inflated to offset increases in rental income to get a greater tax benefit.
Performing general repairs and maintenance on your rental property can be claimed as an immediate deduction. However, expenses which are capital in nature (like initial repairs on a newly purchased property and any improvements during the time you hold the property) are not deductible as repairs or maintenance.
You can claim an immediate deduction for general repairs like replacing damaged carpet or a broken window. But if you rip out an old kitchen and put in a new and improved one, this is a capital improvement and is only deductible over time as capital works.
Rental property owners should carefully review all records before lodging a tax return, taking care to ensure they are claiming deductions correctly.
As reporting rental income and deductions can be complex, many individual rental owners choose to use a registered tax agent to help them prepare their income tax returns.
Ensuring you provide full and complete records to your registered tax agent allows us to prepare your tax return correctly, so you claim everything you’re entitled to and nothing that you’re not.
2024 Tax Planning now
As the EOFY nears, it’s time to review your tax and business. To book a detailed analysis of your tax position before 30 June, call our tax team on 07 4669 9800.
