Investment Property and Negative Gearing

Common investment property claims

It is always advisable to consult a tax adviser. The original Karvis page lists common areas to review, including investment loan interest, accountant fees, insurance, repairs, maintenance, corporate fees, land tax and depreciation.

Stamp duty is not generally claimed as an immediate tax deduction, but it can affect the cost base when calculating capital gain if the property is sold for a profit.

Tax benefits in investment property

Professional advice helps maximize deductions while staying within tax office rules. Proper records and receipt keeping are important for claiming expenses.

You should separate home expenses from rental property expenses and keep receipts so claims can be substantiated.

Negative gearing and capital gains

Negative gearing means you borrow money for an investment and the income is less than the expenses. This is common with investment property where rental income may be lower than interest and other costs.

Capital gain is the amount received after selling capital assets such as property or shares. Capital gains are reported in the income tax return and can increase the tax payable.

Foreign income tax returns

Australian tax residents generally declare worldwide income. Foreign income can include business income, service income, employment income, pensions, rental income, dividends, shares, government pensions, super fund income and bank interest.

If you have paid tax overseas, you may be able to claim a foreign income tax offset credit. Keep proof of tax paid overseas and seek tax advice before lodging.

Sole trader considerations

The original page also notes that sole traders operate and control their own business, can employ workers, are responsible for super obligations and should plan for retirement.