A Quick Guide to Investor Expenses that can be claimed at tax time on your Investment Property
Tax deductions that can be made on your Townsville investment property

Investing in Townsville Property

There are several small but important misconceptions about property investment that can catch out new or would-be landlords. These tips are essential for finding financial success in the Townsville Investment property market. These tips apply regardless of if your property is located in Queensland, the capital cities, or regional areas.

The Federal Government provides attractive financial incentives for real estate investment and you don’t want to miss out on those benefits. But it can be easy to get it wrong and find yourself with a nasty letter from the Australian Tax Office, especially on the issue of interest expenses. These financial incentives can be essential when investing in property in Townsville.

That’s why it’s advisable to obtain professional financial advice and use a professional property management team to take away the day-to-day hassle and worry of being a property investor and provide you with the regular reports to make the end of financial year a breeze. Don’t worry we can provide extensive real estate information and help manage your Townsville rental property and maximise your rental returns.


Tax Deductions For Rental Property Owners | RentFax-RISC Index, Rent Radar,  Proforma Analysis

Tax Deductions For Rental Property Owners | RentFax-RISC Index, Rent Radar, Proforma Analysis


Below are a few common misunderstandings below about interest expenses on Real Estate Investments.

According to the ATO, while interest and loan expenses may be claimable, there are strict rules around this. You can’t claim a deduction for interest expenses:

For any period that you used the property for private purposes, even if it’s a short period. Be sure to nominate any period with your adviser or tax consultant to comply with legislation.

A landlord can have some different techniques that can minimise its tax liability and these deductions can be the difference between negative liquidity and positive liquidity.

    1. You can’t claim any portion of the original loan that you hived off to pay or service another debt, buy a new car, a new washing machine, or be placed straight into your superannuation account. That remains true even if you’re ahead in your repayments
    2. You cannot claim on a separate property loan for which you’ve used your rental as security unless that second property produces income.

The Importance of record-keeping

Keeping great records is the key to submitting an accurate return. At Coral Sea Property Services we provide all owners an end-of-financial year statement which assists with completing your rental property tax return. We specialise in real estate in the Townsville property market and can provide comprehensive advice on maximising the returns on your investment.


Types of rental expenses you can claim

Generally, there are 3 types of rental deductions that can be claimed on your rental property. These are listed below.

Tax Deductions Relevant To Townsville.

Tax Deductions Relevant To Townsville.


Claimable in the current year

Rental expenses such as interest on loans, repairs and maintenance council rates, insurance and property management fees, and charges are claimable in the year that the cost was incurred. You can also claim deprecating assets values up to $300 in their entirety.

Claimable over several years

Some real estate costs need to be claimed over a number of years. These include capital works, borrowing expenses, and the decline in value of depreciating assets. You can get a depreciation schedule that outlines deductions such as the deprecation of value over a number of years.

Non claimable expenses.

Some expenses on a rental property cannot be claimed. These include personal expenses, some expenses of a capital nature, and the purchase of second-hand (or used) depreciating assets after 9 May 2017.


Positive or Negative Gearing


Negative Gearing 101, maximise your investment property returns

Negative Gearing 101, maximise your investment property returns

Positive gearing relates to the net financial result of your investment property. Your rental property is ‘positively geared’ if your deductible expenses are less than the income you earn from the investment – that is, you make a profit from renting out your property.

Your rental property is said to be ‘negatively geared’ if your deductible expenses are more than the income you earn from the property.

The overall tax result of a negatively geared investment is a net rental loss. In this case, you may be able to claim a deduction for the full amount of rental expenses against your rental and other income – such as salary, wages or business income. If your other income is not enough to absorb the loss, you can carry forward your loss to the next income year.



In all circumstances, it’s advisable to seek professional financial advice before buying an investment property or expanding your real estate portfolio. If you are looking for a great accountant for your investment property get in touch and we can recommend you to a local business we work closely with. My article here is for general purposes only and is not professional advice. If you would like to discuss Townsville investment properties further our office is located in Townsville City or alternatively contact me and we can arrange a time to meet at a location suitable for you.


Is Townsville a hotspot for Real Estate?

The Propertyology recently compared national employment data from the 2017 calendar year confirming that numerous locations may soon see considerable strength build in their properties markets. Albury, Armidale, Ballarat Ballina Bowral Cairns Coffs Harbour Dubbo Mackay Muswellbrook Port Macquarie Townsville & Westbrook. Sustained job growth inside a community brings more money in people’s pockets attracts new people to a region and boosts local confidence. The strong economic growth in retailers, accommodation and food, and arts and recreation jobs reflect the sustained strengths of Australian tourism.

What are the most popular suburbs for property investment in Townsville?

Townsville offers unique opportunities for each lifestyle and demographic. Families tend to move further away from cities in nearby suburbs like Kirwan and Annandale and Bushaldn beach/ Northshore. The younger part of the population (such as military personnel, merchant and students) have more incentive to live in locations close to services including entertainment such as pubs and nightclubs. This makes Townsville City ideal for them. The smart investor will often evaluate combinations of different properties when choosing a house or unit with the potential rental and capital returns. A suburb like North Ward with views out to Magnetic Island tends to have a median house price of $775,000 and rental returns of around $500 per week however you can get into the new home market for under $400 000


A little about Townsville

Townsville lies in the North Queensland district. This city was built circa in 1864, only 29 years after Melbourne was founded. Between 1918-1918 an additional 50,000 troops and airmen was stationed at Townsville. This location will eventually be the preferred training venue for U.S. Army training by 2030. Castle Hill is a giant monolith of pink granite at the heart of the city. The wider city is both a sophisticated business hub as well as a scenic tourist destination. Townsville also has nearly 300 days of sunshine annually. The average temperature in some parts of this area to the north is about 28 degrees.


Show the main industries in Townsville?

Townsville ranks among the top ten Australian electorates per capita income. There are robust industries in education healthcare retailing construction and primary industry. Its citizens and those surrounding areas grow with new possibilities and challenges. Defence results in significant employment both directly and indirectly. Townsville consistently ranks as one of Australia’s top 10 cities and one of Australia’s top 10 electorates. It is a Northern Australian electorate that has a strong chance of sustained development and growth.


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