The main reason investors like to buy rental properties in Liverpool is that there is some financial benefit to them. The benefits are immediate in the form of the weekly rent that is paid. However, when tax time arrives there is likely to be some extra financial benefit here too.
There is much information to take in when you become an investment property owner in Liverpool and it can seem daunting. Nevertheless, through with the right guidance and fantastic advice, you will soon feel confident when the time arrives to claim taxes, in knowing that your investment is safe and that you have made the right choices.
To shed some light on how your investment can benefit you at tax time and what you are unable to claim, read further.
Items you can claim
The interest charged on the loan you receive to purchase the property can be claimed, including if you buy land to build a rental property. The interest on any finance to carry out renovations on the rental property can be claimed too, for example, if you get finance to add a covered entertainment area or a carport. If you renovate a kitchen in need of a facelift then this interest can also be claimed.
The interest for loans on depreciating assets can be claimed also, such as air conditioners. Repairs that are required on the rental can also be claimed, you will need to provide supporting documentation such as receipts for these.
You should always seek advice from a professional such as an income taxagent or a property management company in Liverpool to be 100% sure about what you can claim.
Items you can’t claim
While you can claim interest on the home loan while the property is a rental, once you start living there yourself or use it for private use, you can no longer claim the interest. If you use any money from the loan on personal items such as to buy a new car or to invest, you cannot claim the interest on this portion.
If you obtain a new loan to purchase a property that will not be used to generate income, you are cannot claim the interest on this particular loan. To make things simpler when it comes time to claim, it might be wise not to combine loans.
