Rental Property Tax
Rental property investments can be lucrative, but understanding the tax implications is crucial. Rental income is taxable in the year it’s received, whether from tenants or boarders. You can offset taxable income with deductible expenses such as interest payments, council rates, maintenance costs, and depreciation of assets like furniture and appliances. These deductions help lower your overall tax liability.
It’s important to note that residential rental properties typically do not attract GST. However, if you have an investment apartment with a management agreement, there may be GST implications to consider. When selling a rental property, you may also be liable for capital gains tax on the profit from the sale. How you structure ownership—whether in your name, through a trust, or an investment company—can significantly affect your tax obligations.
For personalized advice on maximizing tax efficiency and understanding your specific obligations, consulting a tax professional who specializes in rental properties is highly recommended. They can help you navigate these complexities and make informed financial decisions.
