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Claiming tax deductions on your investment property

Updated: Jun 1, 2022

Check out the common tax expenses you can claim from your investment property at tax time

There are so many benefits that buying an investment property can offer from a tax perspective. If you own a rental property, or several for that matter, be sure to learn about the common tax dedcutible expenses you can recoup from the ATO at tax time. Doing so could put thousands of dollars back into your pocket each year!

Before you make a tax claim on your rental properties

There are few things you need to prepare before lodging a tax refund. Firstly, you must collate the data relating to the income (ie. the rent you earn from your property investment). Next, you will need to collate all data from the expenses relating to your investment property. Your expenses are the (mostly) tax deductible costs that you incur for operating that property for tenants.

Investors can only claim deductions on their property during the periods that it has been occupied by rental tenants. These deductions can only be claimed if the expenses were incurred by the property owner and NOT the tenant.

Your expenses are the tax deductible costs you incur for operating the property for tenants

Expenses you can claim from your investment property

We have created a list of deductions that you can claim on your rental property:

  1. Advertising - the costs incurred when advertising your investment property for a tenant

  2. Strata fees and charges - generally relevant when you own a unit, apartment or townhouse and are required to pay the body corporate

  3. Insurance and income protection insurance

  4. Rates - water and council rates are rental property tax deductions that you are entitled to claim

  5. Land tax

  6. Gardening and lawn maintenance

  7. Other cleaning and pest maintenance expenses

  8. Interest expenses - relating to the loan that is taken on purchasing a property

  9. Possible legal costs - such as the costs involved in evicting a tenant, expenses from court action for loss of rental income and/ or defending a damages claim from injuries incurred from a third party on your investment property

  10. Repairs and maintenance - relating to the wear and tear of your property investment

  11. Pre-paid expenses - those providing services extending beyond current year's income

  12. Property agent fee's and commissions

  13. Investment property depreciation - if your property was built after September 1987 you may be eligible to claim depreciation on your rental property. The Australian Taxation Office (ATO) considers the fact that assets decrease in value over time. Claiming depreciation on rental properties can be done through the ATO under two categories (capital works and plant and equipment assets). Capital works deductions relate to wear and tear on fixed items in your investment property. Plant and equipment assets are the easily removable fixtures.

Thinking about buying an investment property?

Here at REIF we have a team of finance and property specialists who are helping investors across the country to create their financial wealth and build a property portfolio. If you are interested in buying an investment property and making the most of its tax benefits, please reach out to our team today.

Our contact details are listed below:

Ph: 1300 130 932


We explore this topic in our eBook 'Building Wealth Through Property.' Check it out here for FREE!
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