• Rental expenses

    We may send you a letter to verify the rental deductions claimed in your tax return if the expenses reported appear to be outside the average individual claim ranges for borrowing and/or legal expenses.

    The letter will include a schedule showing the amounts you claimed and the proposed adjusted amounts.

    Conveyancing expenses incurred on the purchase and sale of your property are not deductible. Instead, these form part of the cost base for capital gains tax purposes.

    Borrowing expenses of more than $100 has to be spread over five years, or over the term of the loan, whichever is less.

    Understanding your rental expenses schedule

    Below is a sample rental expenses schedule. Keep in mind that your schedule will contain your details and may not look exactly like this one.

    Sample rental expenses schedule

    Rental expenses schedule
    for the year ended 30 June 2015

    Income year

    Rental property address

    Borrowing expense claimed $

    Legal expense claimed $

    2015

    [address]

    $7,300

    $6,600

     

    Adjustments to your tax return

    If you do not contact us, we will use the information above to adjust your tax return.

    Income year

    Original tax return item

    Amount you claimed $

    Adjusted amount $

    2015

    21U – Other rental deductions

    $50,115

    $36,215

    The following definitions will help you understand your schedule:

    • Borrowing expenses – Expenses directly incurred in taking out a loan for the property – for example, loan establishment fees, title search fees, and costs for preparing and filing mortgage documents.
    • Legal expenses – Expenses directly related to any legal services in relation to the property.

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    Last modified: 11 Feb 2016QC 43496