REPAIRS & MAINTENANCE
You can claim back the costs for any repairs to the property or general maintenance. However, if you’ re doing the work yourself you can only claim for materials, not your own time.
If the work is an improvement to the property rather than a repair, then you can’ t claim that cost as an expense.
Examples of repairs and maintenance you may be able to claim:
• Replacing a broken shower head
• Plastering and painting a crack in the wall
• Replacing a blown element in
• a hot water cylinder
Examples where maintenance may be classed as a capital improvement and cannot be claimed:
• Renovating a rundown property to significantly improve or alter it before renting it out.
• Undertaking work that significantly improves a property, e. g. removing a deteriorated wall and replacing it with a new bedroom space.
The distinction between repairs and improvements can be tricky. If you’ re unsure whether work done on your property is repairs or maintenance we suggest you talk to a chartered accountant.
BODY CORPORATE LEVIES
If your rental property is an apartment in a unit title development you may be able to deduct body corporate levies from your rental income, however, it depends on what the levied funds will be used for.
General levies like those used to pay for annual maintenance or administration( such as painting or insurance) will normally be deductible. Levies raised to pay for more significant capital improvements are not deductible.
In situations where an amount levied relates to general repairs and capital improvements, you must be able to reasonably determine the portion that relates to the repairs in order to claim a deduction.
DEPRECIATION
Depreciation is an allowance you can claim to cover the costs of wear and tear and general ageing of furniture and fittings you’ ve bought for your rental property. You can combine assets worth less than $ 5,000, rather than depreciating them separately.
You cannot claim depreciation on the property’ s land or buildings, however, this wasn’ t always the case. This is a complex area and for more information we suggest you speak with a chartered accountant.
OTHER
Other costs you may be able to claim include:
• Body corporate fees
• Fees for arranging a mortgage to
• finance a rental property
• Valuation fees
• Water rates( only if paid by the landlord)
• Gifts for tenants
• Travel associated with managing your property
You can’ t claim deductions for capital expenses, private expenses, or expenses that do not relate directly to your rental property.
8 TENANT INFORMATION GUIDE