Tax Time Tips for Commercial Property Investors

Each financial year brings fresh opportunities to optimise your property investment strategy. Whether you’re a new investor or managing an established portfolio, these insights could significantly improve your bottom line:

Use Depreciation to Your Advantage

Depreciation deductions are perhaps the most significant and often underutilised benefits available to property owners.

Capital works deductions allow you to claim on the structure and fixed assets of your building, typically at a rate of 2.5% per year over 40 years.

Plant and equipment deductions apply to items such as air-conditioning units, security systems, and lifts. Like personal work assets, these depreciate at varying rates and may offer immediate savings.

When a property is sold, the new owner should have a depreciation schedule prepared to ensure they are receiving the full depreciation benefits available.

Get Credit for Loan Interest

Taken out a loan to purchase a commercial property? The interest component of your repayments is generally tax-deductible. This applies not only to loans used for property purchases but also to those used for renovations and other property-related expenses.

Track All Maintenance Expenses

Owners can claim deductions for expenses related to managing and maintaining a property. This includes repairs and maintenance, cleaning, pest control, legal and accounting fees, and property management fees.

Don’t Overlook Rates and Utilities

Often overlooked, utility costs can be tax-deductible provided they aren’t already recoverable from the tenant under your lease agreement. This includes general rates, water charges, and other services. Keep in mind that any outgoings recovered from tenants cannot be claimed as deductions.

Insurance Costs Are Deductible Too

Premiums paid for commercial property insurance are generally 100% tax-deductible. This includes building insurance, public liability, loss of rent, and landlord insurance. Ensuring you claim these premiums correctly can help you maximise your tax benefits while safeguarding your investment.

The end of the financial year doesn’t need to be a chore; it’s the perfect time to review your investments.

Whether you’re ready to expand your portfolio or simply want to know its current value, we can help.

Disclaimer: This article is for general information purposes only and does not constitute financial, tax, or legal advice. You should seek independent advice from a qualified professional to assess your specific circumstances before making any decisions related to taxation or property investment.