Property investors claimed almost $25 billion in rental deductions last year, making an average claim of about $19,250 each.
Of the 1.3 million people who lodged a rental claim, 150,000 were newcomers making their first tax return since becoming a property investor.
According to the ATO, its hit rate for follow-ups to first-time property investors is about 75 per cent -- so check your letterbox.
The biggest area for mistakes is between what can be claimed immediately and what has to be depreciated over many years.
- Interest on a loan
- Repairs from new damage
- Maintenance of existing services and appliances
Expenses that must be claimed over several years include:
- Any damage that existed at purchase
- Renovations and improvements
- Replacement of any fixture or appliance
"One of the biggest mistakes people make is when they use a line of credit to buy a property and then draw on it further to buy a car or a holiday," H&R Block regional director Frank Brass said. "Then they go and claim the total interest against their property investment."
Expenses that can never be claimed include:
- Interest on a loan for property not genuinely for rent
- Travel expenses to the property when it is a personal trip
- Stamp duty on property transfer