Tax Facts on Property Investments in Australia

Investors should always be aware of what their ventures will cost instead of simply looking into the potential returns. Since tax laws can put quite a damper on a property investment, it pays to know what you can expect before you enter such a venture.

Lease Incentives

A lease incentive for tenants is a good way to get businesses to sign onto your commercial property, especially at times when vacancy rates are especially low. In case you offer a tax-free period, though, you’ll be unable to have it deducted. You can, however, assess other expenses incurred on the property for the duration of the tax-free period.

Advertising for Tenants

If you offer to advertise on behalf of your tenants, the cost you incur for the duration of the rental can be deductible. Advertising a property for sale, however, is defined as a non-deductible capital expenditure. At any rate, be sure to keep the pertinent records, as they could prove helpful for capital gains tax purposes.

Tax Warnings

Exercise due caution when identifying the parts of your investments that are deductible; otherwise, you might be in for an audit. Things you should avoid include overstated rental expenses, deductions claimed though not available for rentals, incorrectly depreciating non-deductible items, and incorrect claims for borrowing costs.