Property Owners Tax Guide

 

There are a range of taxes applied to home owners at tax time however whether the house in question is your primary place of residence or whether it is an investment property makes a big difference. Your tax minimisation strategy is going to depend on whether or not you live in the house as different taxes apply to investment properties such as ‘land tax’. We have included a brief overview of the major deductions and taxes you as a home owner (occupant or investor) should be aware of come July.

A home in which you are the owner/occupant

Many people believe that because your primary residence rarely generates income there isn’t many available expenses that can be added to your tax deductions. However, depending on your circumstances there can often be a range of deductions that can be used to save you some serious cash.

 

Home office

If you only work from home and have a dedicated home office there is a range of deductions that you may be able take advantage of.

  • Work related internet
  • Work related phone
  • Costs incurred with maintenance to your home office
  • Home insurance
  • Depreciation of office equipment
  • Utilities
  • Rent or mortgage

 

If you are only working from home but don’t have a dedicated home office and instead work from your kitchen or dining room table, you are entitled to some but not all of the above deductions.

  • Depreciation of office equipment
  • Work related phone
  • Work related internet

 

If you have a dedicated home office but work between the office and home then there are still some deductions you can take advantage of.

  • Work related phone
  • Work related internet
  • Costs incurred with maintenance to your home office
  • Utilities
  • Depreciation of office equipment

 

Renting a room

Expenses incurred in relation to generating rental income from a room in your home can be deducted. Home owners can also deduct expenses from shared living areas within a ‘reasonable figure’ (usually 50% of floor space). A list of possible deductions is shown below.

  • Advertising costs to attract tenants
  • Depreciation
  • Repairs and maintenance
  • Insurance
  • Bank charges
  • Corporate fees
  • Mortgage interest

An investment property

The ATO provides a wide range of concession to investment property owners. Owning property can be very beneficial come tax time if you know how to properly leverage your deductions to minimise tax. We have listed the major areas in which deductions can be made below.

 

Rental Expenses

As listed above there is a range of deductibles to made against expenses incurred in renting as well as offering your property for rent.

Depreciation

Depreciation can be deducted against your tax on an ongoing basis and not only includes the overall property value but contents as well such as appliances, furniture etc.

Land and Council Taxes

Land tax is an annual tax charged against all home owners, if the property is not your primary place of residence then the land tax along with relevant council taxes are fully deductible.

Insurance

Any insurance related to the investment property is tax deductible. This includes landlords, rental, property and home and contents insurance.

Repairs and Maintenance

Any repairs needed to the original state of the property as well as the maintenance needed to prevent depreciation can be deducted.