Rental property owners are in the spotlight as the Australian Taxation Office (ATO) has warned against common tax return mistakes.
According to the ATO, a “majority” of rental property owners are making errors in their tax returns. Most commonly, these are around what expenses can be claimed and when. Particularly prevalent are mistakes around claims for repairs and maintenance versus capital expenditure.
Some tips provided by the ATO include:
* Landlords can claim deductions for expenses incurred in generating rental income. This means any costs you incur in generating rental income each year may be claimed for the same period.
* Repairs can be claimed immediately, but capital expenses like dishwashers or heaters costing more than $300 need to be claimed over time.
* Interest on mortgages can only be deducted for the investment portion of the loan.
* Keep detailed records of expenses and deductions to avoid ATO scrutiny.
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