What You’re Allowed To Deduct For A Rental Property

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).



  • Dont forget to speak to your accountant and arrange a Quantity Surveyor for the Deprecaiton report

  • Can also claim:
    – Insurance premiums
    – Council & Water rates
    – Loan account fees (annual fees etc)

  • Be aware, if you also live in the property you need to divide what you claim it by half or more (depending how many rooms are being rented out and if the common areas are being shared).

    You can also claim depreciation on the furniture and appliances you have in common areas. That’s Fridges, Microwave, Sofa, TV, ADSL Modem, etc..

    I look forward to tax time, that’s when I get my spending money. Pump it into your property and you can claim a portion of it back next year.

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