Hi I have purchased some land built a holiday house and I’m renting it out for holiday use only….. what can I claim back on tax from the property?
Tax Help on Renting out Holiday House
Mafoo on 25/03/2018 - 18:55
Last edited 26/03/2018 - 08:34 by 1 other user
Last edited 26/03/2018 - 08:34 by 1 other user
Comments
What are you hoping to claim back?
You will need to keep accurate separate records of capital-related costs - which you can claim against your CGT liability in the future. And separately a record of running costs that you claim against earning income.
What can I claim back on tax from the property?
Tax accounting costs. Hit 2 birds with one stone.
You can afford to build a holiday home but can't afford to go to a tax adviser to structure your affairs in a way that will give you the greatest tax benefit?
There are ways to structure the holiday home as being available for rent throughout the year and could save you thousands in tax each year.
As a tax adviser myself, I would recommend sitting down with your accountant and planning ahead.
Yes they might charge you $1,000 but in the long run, you may save tens of thousands.
Seek professional advice from a professional?
BAM
This.
Thread can now be closed (please).
You're going to get a dozen different opinions here, but this is the actual best response you need (and likely what you'll end up doing regardless of what is said here).
https://www.ato.gov.au/General/Property/Residential-rental-p…
You can claim a deduction for your related expenses for the period your property is rented or is available for rent.
management and maintenance costs, including interest on loans, can generally be claimed immediately (that is, deducted against your current year's income).
borrowing expenses, depreciation and capital works spending can be deducted over a number of years.
You can't claim:
expenses not actually paid by you, such as water or electricity charges paid by your tenants
acquisition and disposal costs, including the purchase cost, conveyancing and advertising costs and stamp duty* on the title transfer – instead, these are usually included in the property's cost base, which would reduce any capital gains tax when you sell the property
GST credits for anything you purchase to lease the premises – GST doesn't apply to residential rental properties. However, when claiming the expense as a deduction, you claim the total amount you've paid (inclusive of GST, if applicable).
Property genuinely available for rent
Expenses may be deductible for periods when the property is not rented out, providing the property is genuinely available for rent – that is:
the property is advertised, giving it broad exposure to potential tenants
considering all the circumstances, tenants are reasonably likely to rent the property.