Maximising Rental Property Deductions

Owning an investment property can be a powerful way to build wealth — but to truly maximise your return, it’s crucial to understand what rental property tax deductions you’re entitled to.

Whether you’re a first-time landlord or a seasoned property investor, claiming the full range of allowable deductions can significantly reduce your taxable income and increase your refund.

In this guide, we’ll explore the top rental property deductions in Australia, common mistakes to avoid, and how a registered tax agent can help you get the most from your investment.

Why Rental Property Deductions Matter

Every dollar you spend on managing and maintaining your investment property may reduce your taxable income — provided it's genuine, related to earning rental income, and properly documented.

Getting this right is important because:

• It reduces your taxable income
• Helps you improve cash flow
• Avoids ATO penalties for incorrect claims
• Allows you to plan future investments more effectively

What Rental Property Expenses Can You Claim?

Here are the most common rental property tax deductions you can legally claim in Australia:

✅ 1. Loan Interest

You can claim the interest on your investment loan (not the principal). This is often the largest deduction for property investors.

✅ 2. Property Management Fees

Fees paid to real estate agents for managing your rental property — including advertising and tenant screening — are fully deductible.

✅ 3. Council Rates and Land Tax

These are deductible in the year they’re paid, as long as the property is available for rent.

✅ 4. Repairs and Maintenance

Fixing a broken fence, repairing a leaking tap, or replacing worn-out carpet? These are immediate deductions — but only if the expense is to maintain (not improve) the property.

✅ 5. Depreciation

Claim deductions for the decline in value of eligible assets such as:

• Appliances (e.g. oven, air conditioner)
• Furniture (if furnished)
• Flooring and blinds
• Also, don’t forget capital works deductions for structural improvements like roofs, walls, and built-in fixtures.

A quantity surveyor’s depreciation schedule is often the key to unlocking this deduction — we can help organise one if you need it.

✅ 6. Insurance

Landlord insurance, building insurance, and contents insurance (for furnished rentals) are all deductible.

✅ 7. Legal and Accounting Fees

Fees for:

• Preparing lease agreements
• Handling tenant disputes
• Preparing your rental income schedule on your tax return

✅ 8. Advertising for Tenants

Costs for listing your property on real estate websites or newspapers can be claimed in the year incurred.

✅ 9. Travel Expenses (limited)

Travel for property inspections or maintenance is now limited for most individuals. However, it may still apply in certain situations for companies or trusts.

Common Mistakes Property Owners Make

❌ Confusing repairs with improvements – Painting a wall is deductible; renovating a bathroom is a capital improvement and must be depreciated over time.

❌ Claiming deductions for periods when the property was not rented – You can only claim deductions when the property is genuinely available for rent.

❌ Missing depreciation claims – Many investors forget to claim depreciation or assume their property is too old. This could cost you thousands over time.

Pro Tip: Keep Your Records Sharp

To ensure you're audit-proof and claim everything you're entitled to, keep receipts and records of:

• Loan statements
• Invoices and quotes
• Insurance documents
• Council and water rate notices
• Agent statements and maintenance logs

Cloud-based tools or even a simple spreadsheet can make tax time easier — or let your tax agent handle it all.

Why Use a Tax Agent for Your Rental Property Return?

As a registered tax agent, we do more than just lodge your return — we work to strategically maximise your deductions while staying compliant with ATO rules.

✅ We identify claims you may have missed
✅ Ensure correct classification of repairs vs capital works
✅ Help with depreciation schedules
✅ Advise on ownership structures (joint, company, trust)
✅ Provide peace of mind with ATO compliance

Get the Most from Your Investment Property

Whether you own one rental or a full portfolio, our experienced team can help you maximise your return and minimise your tax.

Email us today on assist@taxlogic.com.au 

Let’s turn your investment into a smarter return.