Any costs incurred owning and maintaining a rental property will be a tax deduction against the rent received. These expenditures will include items such as council rates, water rates, Emergency Services Levy, insurance, agent's fees, bank fees and interest on any loan on the property. In some cases, claims can be made for travel, phone calls and so on, where these costs are incurred in managing the property.
In addition, various depreciation allowances are accepted by the Tax Office for plant and equipment such as cookers, air-conditioners, floor-coverings, window treatments and so on. In some cases you will also be entitled to a depreciation allowance on the cost of the building.
GST (Goods and Services Tax) on residential rent is handled differently under the GST legislation than other items.
Firstly, owners cannot charge GST to their tenants. Rent is NET of GST. However, there will be many goods and services purchased by the owner in conducting their rental accommodation business. These GST charges cannot be claimed back on a BAS, but the full GST inclusive price is claimed as an expense.
Taxation is a highly specialised area, and we recommend you speak with your accountant for expert professional advice.
We also recommend you contact a quantity surveyor to work out all the depreciation deductions you can claim each year.
We are pleased to recommend the services of BMT & Associates. Contact them here: http://www.bmtqs.com.au