Rental Property Deductions

To help rental property owners identify what costs are deductible (and when) we have compiled the following lists to assist with your record keeping.

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Expenses immediately deductible

Expenses where you may be able to claim an immediate deduction include:

• Advertising for tenants

• Bank charges

• Body corporate fees and charges

• Cleaning

• Council rates

• Electricity and gas

• Gardening and lawn mowing

• In-house audio/video service charges

• Insurance (building, contents, public liability)

• Interest on loans

• Land tax

• Lease document expenses (preparation, registration, stamp duty)

• Legal expenses (excluding acquisition costs and borrowing costs)

• Mortgage discharge expenses

• Pest control

• Property agent fees and commissions

• Quantity surveyor’s fees

• Repairs and maintenance

• Security patrol fees

• Servicing costs (i.e. servicing a swimming pool)

• Stationery and postage

• Telephone calls and rental

• Tax-related expenses

• Water charges

• Note: ATO no longer allows landlords to claim travel and car expenses from 1 July 2017 

 

Expenses deductible over a number of years

There are three types of expenses you can incur for your rental property that can be claimed over a number of income years:

• Loan setup fees

• Plant and equipment purchases (such as curtains)

• Capital works deductions/building depreciation

• Note: ATO no longer allows depreciation of second hand depreciating assets from 1 July 2017.

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Expenses not deductible

Expenses that are not deductible include:

• Acquisition and disposal costs of the property like stamp duty and settlement fees

• Expenses not actually incurred by you (i.e. water or electricity charges used by your tenants)

• The cost of your own labour in maintaining the property

• Expenses that are not related to the rental of a property, such as expenses connected to your own use of a holiday home that you rent out for part of the year

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The ATO publishes a Guide for Rental Property Owners every year. Here's the link to the 2018 version.

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Disclaimer: the information contained herein is not advice and is for general discussion purposes only. You should seek advice from a registered tax agent in regards to your personal situation.

If you would like us to put you in touch with a registered tax agent or tax depreciation specialist please complete the Contact Us form