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Top 4 property investment tax deductions

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You've found a mortgage broker in Proserpine, Airlie Beach or another part of the Whitsunday Shire, and gotten your hands on an investment property. You're well on the road to putting in a solid financial framework for your future. But you've got one concern: Are you really going to be able to handle the cost?

Good cashflow is essential to running a rental.Good cashflow is essential to running a rental.

One way to give yourself a financial boost while maintaining a real estate investment (or portfolio of properties) is to make use of tax deductions. Here are four that are commonly taken advantage of by investors. 

1. Interest

The interest charged on your mortgage tends to be one of the biggest costs of any property. If you're paying off your home mortgage at the same time, it can be a daunting task to balance both. Thankfully, you can claim not only the interest charged on your investment loan, but also on any loans used to make repairs to your rental, buy a depreciating asset for it (like an oven) or even fund renovations. 

The interest charged on your mortgage tends to be one of the biggest costs of any property.

2. Tenant advertisements

To run a successful investment property, you've first got to attract some quality tenants. As part of this process, you might end up spending a pretty penny on advertising, whether in the local newspapers or on the internet. 

3. Council rates

Every year, the Whitsunday Regional Council looks at how much money it needs to support services and infrastructure, figures out how much it funding it will get from the state and federal governments and then determines how much it will charge in rates. That means any given year, if the circumstances are right, you could end up paying more in terms of rates for your property investment. Fortunately, you can simply write this off your tax bill at the end of the financial year. 

Advertising your rental can bring tax deductions.You can often make tax deductions on advertising your property.

4. Maintenance and repairs

It's not just interest on a loan you take out to fix up your home that you can claim; you can also claim the full cost of fixing it, as long as the damage happened after you purchased it. Note that you can't claim the cost of replacing an item of capital equipment, such as a fridge, stove or washing machine, and you can't claim the cost of an improvement either. 

Remember that you can combine these deductions with a tax strategy like negative gearing if it's appropriate for you, in order to give your cash flow an extra boost.