What tax benefits can I get from investing in property?

Investing in bricks & mortar may offer a variety of tax benefits, both immediate and longer term. As this table shows, many different types of expenses can be tax deductible while you hold the property as an investment.

Type of expense	Example	When can you claim a tax deduction?
Interest on a loan	Buying a rental house or unit Buying land to build a rental Buying a depreciating asset for the investment, like an air conditioner Financing renovations or improvements	Same tax year
Repairs and maintenance	Replacing part of the guttering or windows damaged in a storm Replacing part of a damaged fence Repairing an electrical appliance	Same tax year
Tenancy costs	Preparing a lease agreement Evicting a tenant	Same tax year
Structural improvements	Adding a room Building a retaining wall or fence	Over a number of years
Assets that are part of the investment	Stoves Air conditioners Hot water systems	Over a number of years
Borrowing costs	Stamp duty charged on a mortgage Loan establishment fees Title search fees charged by the lender	Depends on the amount: less than $100 can be deducted immediately larger amounts are deductible over five years or over the term of the loan, whichever is less

This table is for illustrative purposes only. It’s not exhaustive and is subject to change. To make sure, you don’t miss anything, talk to your tax adviser about how to claim the correct tax deductions.

What happens when you sell your investment property?

Many investors focus on the positive impact of tax deductions when deciding whether to invest in bricks & mortar. However, it’s important to remember the potential impact of the capital gains tax.

If you bought an investment on or after 20 September 1985 and you then sell it at a later date. Then you may be liable for capital gains tax if you sell it for more than you paid to buy it.

You can also make a capital gain or loss from some capital improvements made since 20 September 1985 to a home or unit you acquired before that date.

To work out whether you have made a capital gain on your investment, visit the ATO website or speak to your tax adviser.

For other articles relating to this topic why don't you have a look at the following:

http://awesomelendingsolutions-com.hs-sites.com/blog/how-can-i-develop-a-property-investment-strategy

http://awesomelendingsolutions-com.hs-sites.com/blog/what-are-the-benefits-of-buying-an-investment-property

http://awesomelendingsolutions-com.hs-sites.com/blog/steps-to-buying-an-investment-property

http://awesomelendingsolutions-com.hs-sites.com/blog/steps-to-buying-an-investment-property