Make the most of your rental deductions
Did you know that, if you own a rental property, you may be able to claim a deduction for part of the construction cost each year for 40 years?
You can also claim for extensions, such as a garage or patio, renovations such as a new kitchen or a bathroom makeover, and structural improvements such as a carport, sealing the driveway, or building a retaining wall or fence.
The period over which you can claim and rate of deduction per year depends on when the construction began. Generally, if you built after 15 September 1987 you can claim 2.5% for the next 40 years. So even if your rental property cost $100,000 to build 25 years ago, you could still be claiming a deduction of $2,500 each year.
You need to know the construction dates and costs (not the purchase price) to calculate your deduction. If you didn’t carry out the construction yourself or engage a builder to do so, it may be worthwhile to ask a Quantity Surveyor or other qualified person to determine the construction cost for you.
You can also claim a deduction for the cost you pay to obtain this information. Talk to us about the benefits of claiming a capital works deduction on your rental property.