5 Common Rental Expense Mistakes (And How to Avoid Them)

Common examples of expenses wrongly claimed:

1. Purchase price of the rental property
2. Interest on loans not used for the rental
3. Capital portion of mortgage repayments
4. Costs of capital improvements to property
5. Real estate & legal fees while selling property*

*Some exceptions apply

So, How can you avoid these mistakes?

Remember these 3 Basic Rules:

1. You cannot claim deductions for:
   • Private Expenses
   • Capital Expenses
   • Unrelated expenses
2. Capital Expenses Include:
   • Buying a capital asset OR
   • Increasing value of an asset
3. Private expenses are those…
   • You buy
   • Pay for
   • For your own benefit (Rather than to generate rental income)

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