You could be missing out on a refund!
First it is important to understand that the Australian Tax System is very different to the Irish/UK systems when it comes to investment properties, so if you are basing your knowledge on what you can claim or not on the Irish/UK system you are most likely paying too much Tax!
The major difference between the Irish and the Australian tax systems in relation to property is that under the Australian system you can claim for depreciation on the construction cost of your property. For example a typical property in Ireland costs about €200,000 to build, this can be claimed as a deduction over 40 years or €5,000 per year.
At current exchange rates this could reduce your taxable income in Australia by $7,500 every year.
If you haven’t figured it out already this is largely the reason that so many people in Australia are falling over themselves to buy investment properties. This is more commonly known as negative gearing, which basically means that if you have a loss making investment that you can use that loss to reduce your taxable income.
So you may think that your property isn’t making a loss. When depreciation is taken into account you could very well be making a loss under the tax system.
Contact us through this website for a free estimate of what the depreciation deductions may be on your property.
You get to claim back the tax that you have been paying to the Irish Revenue