Renovating rental properties tax effectively
So your rental property needs a lick of paint, some cosmetic repair work or some bath room improvements to help you attract a better tenant and a higher rental return?
Should you get stuck in and get it done or should you call your accountant for clarification of the rental property tax rules?
My advice is to do a little research yourself. The Australian Tax Office offers a very comprehensive tax guide for Rental Property Owners. Find out how the Tax Office defines a repair?
Tax Tip
My rule of thumb: A “repair” is something you do to restore something to its original working order. I take my view with the following clarification: If the cost of a repair relates directly renting out my property, I expect to be claiming a tax deduction against income. If I have to rectify damage and wear and tear caused by a tenant, I expect to claim a deduction against income.
Please leave a comment and let me know your experience.