32: Top 10 Tax Mistakes to Avoid for Investment Property Owners

Are you ready to find out if you’ve been making costly tax errors with your investment property? Let’s dive into the details! 

In this episode, we unravel the common mistakes that investment property owners make when lodging their tax returns. With the end of the financial year fast approaching, it’s crucial to get your tax details right.  

Sally dives into the top 10 pitfalls identified by the ATO, from understanding initial repairs and capital improvements to correctly claiming depreciation and borrowing expenses. 

Discover why the way you categorise repairs and improvements can significantly affect your tax deductions. Learn about the nuances of claiming interest on your loans, and why using borrowed funds for private purposes can be a costly mistake. Uncover the importance of keeping detailed records and how to accurately calculate capital gains when selling your property. 

Sally breaks down the complex tax laws surrounding property improvements, repairs, and expenses, ensuring you have the knowledge to make informed decisions and avoid costly mistakes. 

In this episode of the Smarten Up! The Tax and Business Podcast, you'll learn: 

• Understanding the difference between initial repairs vs. capital improvements and how to avoid costly mistakes (02:00) 
• Learn what you can and can’t claim as depreciation (05:00) 
• How to correctly claim interest on loans and avoid non-deductible pitfalls (07:30) 
• What expenses are deductible over the life of the loan (09:45) 
• Why stamp duty is a capital cost and how to handle it (12:00) 
• Claiming capital works deductions over 40 years (14:00) 
• Deductible vs. nondeductible body corporate fees (16:00) 
• Apportioning expenses and income correctly for co-owned properties (17:30) 
• How to limit deductions to periods of income generation for private use of properties (19:00) 
• The importance of maintaining detailed records (21:00) 
• Calculating gains or losses accurately when selling your property (23:00) 

By understanding and avoiding these common tax mistakes, you can ensure your investment property works for you, not against you. Remember, staying informed and seeking expert advice is key to maximising your tax benefits and keeping more of your hard-earned money. 

Whether you're a seasoned investor or just starting, understanding these common errors can save you time, money, and stress. Remember, tax compliance is key to maximising your investment returns. 

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