Landlords tax deductions rise to $38.6 billion or $23,000 per tax return: ATO figures

Australia’s 1.76 million landlords claimed a total of $38.6 billion in tax deduction in the 2010-11 tax year, the latest ATO statistics show.

This equates to an average tax deduction of $23,000 per landlord.

The aggregate figure was an 18% increase on the $32.8 billion in tax deductions claimed in the 2009-10 year, where 1.7 million landlords claimed an average deduction of $19,000.

Deductions for interest paid on home loans was the greatest tax deduction claim rising from $18.4 billion in 2009-10 to $22.7 billion in 2010-11.

According to accountants DBA, landlords can claim interest on borrowings if the property was acquired for the purpose of producing assessable income, including interest paid in advance.

Landlords are also entitled to claim deductions for repairs and maintenance of their investment property, though not for capital expenses like alterations or additions.

The ATO figures show a small rise in capital works deductions from $1.7 billion to $1.9 billion.

Other rental deductions rose from $12.8 billion to $14 billion.

Other allowable rental deductions include borrowing expenses including legal costs, bank account costs, accountants and property consultant fees, insurance, property management costs, local council rates, water rates and usage, land tax, advertising for tenants and depreciation.

Around two-thirds of property investors have negatively-geared property investments, the ATO figures also show.