“Until then, tenants may be looking for more shared accommodation or exploring cheaper rental markets in the outer fringes of metro or regional Australia.”
Almost half of Australia's 2.2 million rental property owners are negatively geared, meaning the expenses associated with their rental property are greater than the income they earn from it.
Landlords can claim immediate deductions for general repairs and maintenance of a rental property. But Thomson said they could not do this for capital expenditure, such as improvements made while owning the property or on a new purchase.
“You can claim an immediate deduction for general repairs like replacing damaged carpets or a
broken window,” he said.
“But if you rip out an old kitchen and put in a new, improved one, that's a capital improvement and it's only deductible over time as the capital works out.”
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Thomson said rental property owners should carefully examine their records and consider using an accountant to help prepare accurate tax returns.
“We encourage rental property owners to carefully review their records before filing their return and ensure they are claiming deductions correctly,” he said.
“Making sure you provide full and complete records to your registered tax agent allows them to prepare your tax return correctly, so you claim everything you're entitled to and nothing you don't.”
The Tax Agency also continues to focus on deductions for working from home after revising the flat rate calculation method last year. The changes meant workers needed full records to back up their claims, Thomson said.
“Deductions for work-from-home expenses can be calculated using the actual cost or the
fixed rate method and keeping good records gives you the flexibility to use the method that
work for you and claim the expenses you are entitled to,” he said.
“Copying and pasting your work-from-home claim from last year can be tempting, but this
it will probably mean that we will contact you for a “please explain”.
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