Top 10 tax deductions for an investment property

A history of strong capital gains and the desire to ‘touch and feel’ investments drive investors towards the relative security of residential property.

Combine this with population growth predictions, limited land for development, and a shortage of rental accommodation in most capital cities and starting or expanding a residential property portfolio provides an attractive investment opportunity.

The cost, conditions and structure of your investment finance will significantly influence your return on investment. So too will the effective management of ongoing costs.

Here are 10 general costs associated with an investment property that you may be able to claim as tax deductible expenses. Just remember, always work with your accountant who will tailor advice to you specifically. That way you’ll not miss out on a claim or breach a rule that risks an audit.

1. Rental advertising costs – If you’ve had to find a new tenant, your marketing expenses are a legitimate claim.

2. Interest on your loan – Together with bank fees, the interest that you’ve paid on your mortgage (not the reduction of the principal) can be claimed.

3. Council rates – While these are an annual cost, they can be claimed only for the period during which a tenant is in residence.

4. Insurance – You’ll likely have a landlord insurance policy and also building insurance. These are expenses that in most cases are tax deductible.

5. Land tax – Consult your accountant before making any claim, or find the latest rules on the ATO’s website. Look for the “residential rental properties” area but it is worth discussing this expense with your accountant.

6. Strata fees – Like rates, these can be claimed for the period you have a tenant in the property.

7. Depreciation – This can be a big-ticket item. You should have had a quantity surveyor create a depreciation schedule. Claims can cover contents such as appliances, carpets and blinds and, if within the rules, renovations and the building structure. Speak to your accountant before organising a depreciation schedule.

8. Maintenance – Claims are accepted if they relate to general wear and tear but not if they are replacing or adding to the value of the asset. Don’t confuse maintenance with depreciation. If a stove breaks and you replace it, that’s not maintenance; the new stove has to be depreciated.

9. Garden – This is another confusing area. You can claim costs of upkeep, such as lawn-mowing. Any expenses that add value to the property, such as a retaining wall, must be depreciated.

10. Professional services – Your property management fees, costs associated with accounting, book-keeping, and any legal expenses can all be claimed.

If you are considering starting or adding to your property portfolio for investment purposes, or simply need the name of a proven accountant or property manager, I can help.

Feel free to call me on 0433 279 639  or click the button below and request a callback.

Published 12.06.24


THE FINEPRINT: The information provided on this site is on the understanding that it is for illustrative and discussion purposes only. While all care and attention are taken in its preparation any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances.

Green Finance Group Pty Ltd ACN 145 035 221 is authorised under LMG Broker Services Pty Ltd ACN 632 405 504 Australian Credit Licence 517192.

Would you like to know more?

Contact us

LATEST Top 10 tax deductions for an investment property ARTICLE

"Green Finance Group wins record 25 finance awards in 6 months"

Meet the Author

"Whether you are a first homebuyer, upgrading or downsizing, are an experienced investor, or you simply want to save money on your existing loans, I can help you to understand the range of options available to you."

Will Dalton

Finance Consultant, BBus(Finance)

Level 1/161 Robertson St Fortitude Valley Qld 4006

A home loan expert who knows what it takes to find you a better finance deal.

With access to home loans from over 60 lenders I can provide you with real choice when it comes to home loans and refinancing options. Whether you need to know how much you can borrow or how much you could save on your existing mortgage today, I can help.