What can you claim on your rental property?

Make sure you know what deductions you’re entitled to claim as an investor .

With tax time approaching, landlords need to clear about what deductions they can claim in relation to investment properties.

No doubt you’ve had some expenses in relation to your property during the past financial year but they won’t necessarily all be tax deductible.

Before putting in your tax return, it’s essential that you understand what you claim on your investment property and what you can’t.

While you should, of course, do your tax return in consultation with your accountant, here are a few tips to help with your preparation.


Make sure you have records for every claim you make and that you keep those records for five years. Among the records you should retain are details of rental income and expenses, insurance details, depreciation reports, records of ownership and the costs of acquiring the property. Even if you dispose of the property, you should also keep records for five years.


You can claim deductions for the costs of repairing and maintaining your rental property in the year you pay them as long as they relate directly to wear and tear or other damage that occurred due to renting out the property. You can’t claim the total costs of repairs and maintenance in the year you paid them if they did not relate directly to wear and tear or other damage that occurred due to renting out your property. These are capital expenses you may be able to claim over a number of years as capital works deductions or deductions for decline in value.


Generally, the cost of travel you incur to inspect or maintain rental properties or to collect rent is an allowable deduction. However, you can’t claim travel if you go to the property for private purposes such as a holiday, or to carry out work when the property is not genuinely available for rent or to make repairs for damage that occurred before you made the property available for rent.


You claim as an immediate deduction the interest on a loan to buy a rental property or to buy land on which to build a rental property. There are other expenses that are deductible over a number of years including borrowing costs such as stamp duty charges on the mortgage, loan establishment fees and title search fees.

For a full run-down on the claims you can make in relation to your investment property, visit the Australian Taxation Office’s website at www.ato.gov.au or call 132 861.