The costly tax mistakes property investors make every year

The costly tax mistakes property investors make every year centers on how assumptions about deductions often break down in practice. The article says a common belief is that owning an investment property automatically makes expenses deductible, but deductibility depends on whether the cost was incurred in earning assessable income. A frequent error involves treating improvements as repairs, such as replacing an entire fence versus repairing part of it, or renovating a bathroom versus fixing wear and tear. Timing also matters; expenses are not automatically deductible from settlement if the property is not genuinely available for rent, still under renovation, or held for private use before tenants move in. It highlights interest deductions as another area of confusion, particularly when loans are refinanced or redrawn—deductibility depends on how the borrowed funds were actually used, not the investment property’s collateral. The piece notes the growing influence of changing investor behavior, though the final discussion is cut off.