tax deductions for rental property investors

If you own a residential property that is rented (or available to rent) during the year, some of the tax deductions that you may be able to claim are listed below.

  • The cost of advertising for tenants
  • The cost of property management fees (eg paid to a real estate agent to manage the property on your behalf)
  • The cost of bank fees paid on the account you deposit the rent into and pay expenses out of and also on any bank loans used to finance the purchase of the property
  • The cost of body corporate or strata fees paid (usually only if your property is a unit, flat or townhouse)
  • The cost of loan establishment fees paid to your bank to set-up the original loan to purchase the property or if you refinance your loan with a different lender
  • The cost of cleaning the rental property (eg cleaning carpets, blinds etc after tenants vacate the property)
  • The cost of Council rates for the property
  • The cost of maintaining the gardens and pool (eg lawn mowing, landscaping, pruning, pool cleaning and water monitoring)
  • The cost of insuring the property (including building, contents and landlords insurance policies)
  • The interest paid on your mortgage (you can only claim interest on a loan that is specifically taken out to purchase or renovate the rental property)
  • The cost of Land Tax, if you are required to pay it
  • The cost of legal fees in relation to your tenants (eg if you have to engage a lawyer to collect outstanding rent or to evict a tenant. You cannot claim for the legal fees you pay when you originally purchase the property until it is sold)
  • The cost of pest control fees (eg to prevent or treat termite or other pest infestations)
  • The cost of repairs made to the property, fixtures or plant (eg building, bathroom fittings, stoves, lighting, carpets, blinds etc – you should let us know what specific repairs you have undertaken and how much each repair cost to ensure we claim the maximum amount on your return)
  • The cost of maintaining the property (eg cleaning gutters, repainting internal or external walls)
  • The cost of replacing capital items (eg stoves, dishwashers, bathroom fittings, pool pumps, carpets, kitchens, hot water heaters, air conditioners or heaters etc)
  • The cost of stationery, postage, telephone calls and internet access related to the property, collecting rent or undertaking maintenance and improvements
  • The cost of water rates paid for the property
  • Any other expenses you have paid that relate to the property (we will check if these are allowable tax deductions when we prepare your return)

We suggest that you keep receipts for all purchases that relate to your investment property, even if they are not listed above. That way, when we prepare your tax return we can decide whether you are allowed to claim a tax deduction for them or not.

If you would like any more information about the deductions listed or if you would like the Personal Tax Specialists team to prepare your tax return for you to ensure you maximise your claims this year, contact us at info@personaltaxspecialists.com.au.