Personal Tax Specialists

tax deductions for rental property investors

Being a property owner can have multiple benefits. Not only is it a great long-term investment to have, but it is also a way of earning extra income. You can rent your property out and put some extra cash in your pocket. If you own a residential property that is rented (or available to rent) during the year, some of the investment property tax deductions that you may be able to claim are listed below.

  • The cost of advertising to attract new tenants.
  • The cost of property management fees (e.g. fees that are 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 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 can also be claimed for in your tax return under rental property (e.g. cleaning carpets, blinds, etc. after tenants vacate the property and before new tenants occupy the property).
  • The cost of Council rates for the property.
  • The cost of maintaining the gardens and pool (e.g. 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 (e.g. 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 (e.g. to prevent or treat termite, or other pest infestations, such as insects, beetle, rats and vermin).
  • The cost of repairs made to the property, fixtures, or plant (e.g. 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 (e.g. cleaning gutters, repainting internal, or external walls).
  • The cost of replacing capital items (e.g. 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 rental property, collecting rent, or undertaking maintenance and improvements.
  • The cost of water rates paid for the property.
  • You can also claim any other expenses you have paid that relate to your rental 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. We will be your investment property tax accountants.

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