Tick-off checklist for immediate deductions

A deduction checklist should help ensure you don’t forget any immediately-deductible expenses.

Your checklist should include:

• Interest on your investment loan. (If your property is negatively geared, the shortfall between the rental income and the deductible expenses – including loan interest – is deductible against your other income)

• Land tax

• Council rates and water charges

• Body corporate fees and charges for day-to-day administration as well as contributions to a general-purpose sinking fund

• Insurance (building, contents, public liability)

• Repairs and maintenance (see strategy two)

• Real estate agents’ fees and commissions for managing your property, inspecting the property and collecting rent. (Agents’ commissions to buy or sell your property are nondeductible but form part of the CGT cost base)

• Gardening, lawn mowing, cleaning

• Pest control

• Leases (preparation, registration and stamp duty on leases)

• Mortgage discharge fees

• Advertising for tenants

• Tax-related expenses (including fees charged by quantity surveyors to support claims for depreciation)

• Bank charges

• Electricity and gas (when not paid by tenants)

• Limited legal expenses such as involving eviction of a tenant (However, most legal expenses – including for the purchase and sale of a property – are regarded as non-deductible capital expenditure. Keep records as these costs should reduce the eventual

capital gains tax payable on the sale of your property)

• Service of equipment such as water heaters

• Travel (to inspect your property, collect rent and carry out maintenance)