Landlord Tax Deductibility – Know what you can claim

Maximise Your Tax Deductions This Financial Year

As a property owner, knowing what rental-related expenses you can claim can significantly boost your returns. With interest deductibility back on the table and a range of claimable costs available, now’s the time to sharpen your tax strategy.

Here’s a breakdown of what you can and can’t claim — and where expert help matters most.

Claimable Expenses for Landlords

1. Interest on Loans
   ✔ From 1 April 2024, you can claim 80% of your interest costs on loans for residential rental properties.
   ✔ From 1 April 2025, this rises to 100% — full deductibility returns.
2. Property Management Costs
   ✔ Fees for professional property managers, or one-off services like inspections, tenant screening, lease agreements, and repairs coordination.
3. Insurance & Rates
   ✔ Council rates and landlord insurance premiums are fully deductible.
4. Accounting & Legal Fees
   ✔ Tax return prep, ongoing advice, and legal costs (up to $10K/year) for buying rental properties.
   ✖ Legal fees for selling are only deductible if you’re in the business of renting.
5. Repairs & Maintenance
   ✔ Repairs like fixing a leaky tap or repainting a wall are deductible.
   ✖ Major improvements or upgrades? Not deductible — these are capital expenses.

Other Deductible Expenses

• Body corporate admin/maintenance fees

• Water rates (if paid by you)

• Mortgage arrangement or valuation fees

• Tenancy agreement costs

• Legal fees for unpaid rent recovery

• Reasonable travel for property inspections

• Tenant gifts

• Depreciation on chattels (e.g. heat pumps, appliances > $1,000)

• Low-value assets (items ≤ $1,000 can be claimed in full upfront)

What You Can’t Claim

• Property purchase price

• Mortgage principal repayments

• Costs of capital improvements (e.g., adding a room or second bathroom)

• Repairs that improve the property beyond its original state

• Real estate agent fees for buying or selling

• Your own labour or time

• GST on rent (residential rent is GST-exempt)

• Initial setup costs (e.g., building reports, due diligence)

• Healthy Homes upgrades that didn’t previously exist (e.g., new insulation)

• Full-year expenses when the property is only rented for part of the year

 

A Quick Note on Depreciation

You can’t depreciate land or buildings, but you can depreciate chattels and furnishings (over $1,000), or group low-cost items under $5,000.