6 investment tax tips for a bumper return

Do you own an investment property or perhaps you have a whole portfolio under your ownership belt? Well lucky you because one of the major perks of being a property investor in Australia - if your property is negatively geared - is the range of deductions you can make on your taxable income at tax time.

To ensure you get the best possible return, we’ve turned to Mozo’s resident property guru, Steve Jovcevski to provide his top investment tax tips:

Home Loan Comparison Table - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2021
    Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.85% p.a.variable for 24 months and then 2.25% p.a. variable
    2.21% p.a.

    New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

    Go to site
    Details
  • placeholder
    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.85% p.a.
    fixed 3 years
    2.24% p.a.

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

    Go to site
    Details
  • placeholder
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.32% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    1.99% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    Go to site
    Details
  • placeholder
    Variable Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    1.99% p.a.

    Refinance only. Super-fast digital application process. Zero upfront fees. No on-going service fees. Free 100% offset sub account. Comes with Visa debit card and the ability to use digital wallets; Apple and Google Pay. 25% deposit required.

    Go to site
    Details

1. Get an accountant that specialises in property

According to Steve, some of the more common expenses that are claimable for investors include the interest you pay on your investment loan, water/council rates, home and contents insurance, landlords insurance and the cost of maintaining the property (e.g repairs and renovations).

Sounds like there’s a lot to claim at tax time right? But that could be just the tip of the iceberg because if you find yourself a reputable tax agent that specialises in property, Steve says “they’ll be able to ensure you claim everything you possibly can on your investment property.”

“For instance, many developers that are building a new property aren’t aware they can claim GST if they are selling the property, under the margin tax scheme.”

2. Keep receipts in order

Whatever you decide to claim, make sure you have the receipts to back up your deduction, in case you find yourself audited by the tax department.

“You may also need to keep other records, such as a logbook of the kms travelled to visit your investment property, which are also generally claimable.”

3. Submit your tax return every year

Steve says there are two reasons you should do your tax return each year:

- You’ll bring down your tax payable through the property related deductions you make

- On top of this you’ll avoid getting into trouble with the tax office and the slap of a “failure to lodge on time penalty”

4. Consider prepaying interest on your loan

If you think you might need more than your general tax expenses to drop down your taxable income, another option is to prepay the interest on your investment loan for the 12 months ahead.

“You can also prepay the premiums on your home and contents or landlord's insurance,” adds Steve.

5. Ask for a depreciation schedule

For those investors out there purchasing or building a new property, Steve recommends hiring a “a quantity surveyor to draw up a depreciation schedule for you, which will outline the different costs that are claimable over a 10 year period.”

6. Spend it!

Last piece of financial wisdom from Steve:

“If you find yourself with a bumper tax return, don’t leave it sitting in a savings account with an interest rate sitting under the 4% mark. Instead put that money to work, by getting around to those repairs/renos you’ve been planning for a while. Your tenants will love you and so will your next tax return!”

There’s plenty more to know about investing in property like a pro. So discover more handy tips and tricks in our investment hub.

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.