Allowable Tax Deductions
Have you looked at all your allowable tax deductions?
I have received letters from people saying that they did not know about Tax Depreciation Schedules, or if they had heard about them, they did not know it applied to properties that they owned.
A Tax Depreciation Schedule should be done for any property that is either built or had capital expenditure done on it since 18 July 1985.
Even on a house 20 years old, it is still possible to get a tax depreciation allowance, possibly up to or more than $4,100 per year.
Capital expenditure inside the home, or outside can be added to your Tax Depreciation Schedule.
How is this going to help you with your negative gearing short fall?
If you are finding it difficult to meet your mortgage repayments, then make sure that your investment property has a Tax Depreciation Schedule done and that it is up to date. This could make all the difference to your problem.
The difference between capital expenditure and maintenance is where the cost is going to improve the overall value of the property.
Capital expenditure which can be tax depreciated, could be a paint job, new flooring, a new driveway, or a car port.
A maintenance expense would be the replacement of an element in the hot water tank, a replacement for a broken light fitting – in other words, costs that are essential to the renting out of the house in a fit and useable state.
Know the difference between the two and use your tax deductions to your benefit.
Filed Under: Tax Tips
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