Real Estate Tax Deductions

Residential Property Tax Deductions in a SMSF

Residential Property

Residential Property in a Self Managed Super Fund under a lease agreement with tenants paying rent will incur expenses relating to the property which can be claimed and include the following :

Property administration

  • Insurance (building, contents, public liability)
  • Advertising for tenants
  • Property agent’s fees and commission
  • Some legal expenses
  • Interest expenses – if the property is part of a limited recourse borrowing arrangement

Rates and taxes 

  • Body corporate fees and charges
  • Council rates
  • Water and electricity paid by landlord, but not those paid by the tenant
  • Land tax

Property maintenance

  • Cleaning the property
  • Gardening and lawn mowing
  • Pest control
  • Repairs and maintenance but not the cost of improvements
  • Capital works deductions
  • Travel expenses to inspect property, not deductible after 1 July 2017

Depreciation

  • Depreciation of the property can be claimed against contributions made to your SMSF

Talk to your Accountant

What we are sharing with you is of a general nature and your accountant or industry professional will clarify what you are able to claim which will vary according to type of property and tenancy

If you have made improvements or are considering making improvements understand the financial and tax implications and whether or not you are legally able to make the improvements (especially where there are borrowings in the SMSF on this property)

Other types of rental property could include Air B&B, Holiday House, Bed and Breakfast, Vacant Land

Tax Deductions are there for the taking

  • On speaking with your accountant or industry professional who is able to provide tax advice, take advantage of all claims you have at your disposal so that the tax man and your tenant are helping contribute towards your retirement planning


REMEMBER :  Not all property is Investment Grade and very few residential properties lend themselves to being investment grade especially residential property in a SMSF. We understand residential property in Super and can point you in the right direction when it comes to identifying which property and which property strategy would work best for you and your Self Managed Super Fund requirements.

As a trustee of your SMSF; “it is imperative that you get your Investment Decision right at the outset, as this will impact on your return on investment over the next 7 – 10 years or longer!”

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