Tax deducation

[Nikolina]

on an investment property is the water completely tax deductible or just then fixed charges? I tried to look on the ato website but it's currently closed! I would assume that just the fixed cahrges are tax deductible but can some please confirm that??

[Propertunity]

on an investment property is the water completely tax deductible or just then fixed charges? I tried to look on the ato website but it's currently closed! I would assume that just the fixed cahrges are tax deductible but can some please confirm that??

Nik,

In NSW its usually the tenant that pays the water bills UNLESS it is a multiple tenancy and the tenancies are not metered separately. However, this was not your question.

ALL expenses incurred in having / maintaining an IP are tax deductible I would have thought - rates, insurances, repairs, PM expenses, tenant gifts, fixed water charges, water usage charges, garbage collections, bank fees for the Dir Deposits, phone calls to your PM, etc

[Nikolina]

Nik,

In NSW its usually the tenant that pays the water bills UNLESS it is a multiple tenancy and the tenancies are not metered separately. However, this was not your question.

ALL expenses incurred in having / maintaining an IP are tax deductible I would have thought - rates, insurances, repairs, PM expenses, tenant gifts, fixed water charges, water usage charges, garbage collections, bank fees for the Dir Deposits, phone calls to your PM, etc

Hi Propertunity,

I am from NSW and as per section 19 of the residential tenancies act 1987 it is the landlord's responsibility to pay the fixed water chagres and it is the tennants responsibility to pay the water usage charges. Which brings me to my question is the whole bill tax deductible or just the fixed charge??

[Propertunity]

Hi Propertunity,

I am from NSW and as per section 19 of the residential tenancies act 1987 it is the landlord's responsibility to pay the fixed water chagres and it is the tennants responsibility to pay the water usage charges. Which brings me to my question is the whole bill tax deductible or just the fixed charge??

Hi Nik,

On the income side of your IP business you will have rent + other charges you can claim from the tenant - like water usage.

On the expense side you will have interest payments + water usage + fixed water charges + all the other stuff I mentioned.

The water usage being on the income side AND the expense side will nett off (i.e. add to zero)....but the fixed water charges remain on the debit side and are therefore an expense..... and a tax deductible one at that, because you need to have water there to make it habitable.

[The Y-man]

Hi Propertunity,

I am from NSW and as per section 19 of the residential tenancies act 1987 it is the landlord's responsibility to pay the fixed water chagres and it is the tennants responsibility to pay the water usage charges. Which brings me to my question is the whole bill tax deductible or just the fixed charge??

You claim the bill you get sent (fixed charges). The tenants (if not a common meter as described by propertunity above) will get a separate bill for usage (which you never see).

Cheers,

The Y-man

[Nikolina]

You claim the bill you get sent (fixed charges). The tenants (if not a common meter as described by propertunity above) will get a separate bill for usage (which you never see).

Cheers,

The Y-man

But how can i claim tax on the water usage when it's not my expense.. the tenants pay for that?? I get a bill with both fixed and usage charges on it, i pay the lot but my tenant reimburses me for the usage.

[Propertunity]

But how can i claim tax on the water usage when it's not my expense..

You can't. You can only claim a tax dedn. of your out-of-pocket expenses, which in this case is the fixed charge only.

If the tenants are paying the water usage charges, then that component is not a deductible expense to you. It is costing you nothing - so you have no claim.

As you have explained the situation, your only claim (for tax) would be on the fixed component.