Properties purchased prior to 27 March 2021 will have the interest deductibility phased-out over 4 income years.įor clients wanting to do major renovations, the difference between what is considered as repairs and maintenance and capital expenditure can be complicated.Ĭosts of making any additions or improvements to the property are not deductible. Interest on mortgages will only be deductible for properties purchased after 27 March 2021 till 1 October 2021 unless its newly built property.Valuation expenses if required for obtaining a mortgage.Travel Expenses when traveling to inspect or do repairs on the rental property.Depreciation on capital items or chattels such as heat pumps, appliances, etc.The following are some of the expenses that are deductible for tax purposes against rental income from residential properties: It is important to be aware of the capital versus revenue nature of renovation and repairs expenditure when expensing (or not) these types of costs. Some clients are thinking about doing major renovations since they are unable to deduct interest expenses going forward and are assuming that all the renovation costs will be deductible for tax purposes. Since our last blog on ‘Tax Changes for Residential Rental Properties’in April we are getting a lot of clients wanting to know what can be claimed as an expense against the investment rental properties.
Call Sheral now for tax advice on your circumstances.ĭeductible Expenses for Residential Investment Properties This post is by Sheral Reddy, an chartered accountant and tax specialist at GECA Chartered Accountants.
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