What You’re Allowed To Deduct For A Rental Property

One of the reasons rental property remains a popular investment for many Australians is that it brings tax advantages. As our Tax Week 2013 coverage continues, here’s a reminder of what expenses you’re allowed to claim.

Rental picture from Shutterstock

The Australian Taxation Office has a handy overview of expenses you can claim immediately in the year they’re incurred, and those which have to be divided over a number of years. Expenses you can claim against your rental income immediately include:

  • Interest paid on loans to purchase the property (remember, only the interest is claimable);
  • Repair costs for the property;
  • Costs associated with managing the tenancy (such as preparing a lease or evicting a bad tenant)

Loan establishment fees and other associated costs typically have to be divided over a five year period, unless their total is under $100 (which is unlikely). Improvements also need to be depreciated over a number of years.

Hit the link for a more detailed overview (and, as ever, consult an accountant if you want specific advice).



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