Property investment comes with plenty of advantages and rewards, such as increased financial freedom, diversified income streams as well as the ability to build long-term wealth. However, come tax season, it can all start to feel messy and confusing. With multiple deductions available, it’s hard to know what you’re entitled to claim, and whether or not you’re missing out on some significant savings. To help you out, we are shedding some light on the most important tax deductions to ensure you are not leaving any money on the table.

What Isn’t a Tax Deductible Expense?

Firstly, to ensure your investment property is profitable, always ensure your claims are valid and directly related to the income earned from your property. Knowing what you cannot claim on your investment property will help you avoid making any costly mistakes. Generally, you cannot claim expenses related to:

• The cost of purchasing a property (such as agent’s fees and legal costs)
• Stamp duty
• Renovations or reairs carried out before renting out the property
• Capital work that enhances the property’s value
• Bills paid by tenants
• Property selling costs

It’s also worth noting that any expenses incurred when the property is not available for rent or when you use it for personal reasons are also not claimable. Knowing what you can’t claim is not only crucial in ensuring the validity and accuracy of your tax return but also in maximising your allowable deductions.

15 Tax Deductions you Need to Know

• Property maintenance – Expenses like cleaning, gardening and pest control
• Property repairs – These repairs must be solely for practical purposes and not aimed at increasing the value of your property
• Property management and administration fees – You can claim fees for the property management team you hire to help manage your investment property
• Interest – Any interest you pay on a loan to purchase the property or any loans used in relation to the investment is claimable
• Council rates – The expenses you pay for local government services like water, sewerage and rubbish collection can be deducted
• Insurance – Protecting your property from any unforeseen circumstances is a sensible move and the expenses for this can be deducted
• Depreciation – This will allow you to claim a tax deduction on the wear and tear of your investment property
• Travel expenses – If you must travel to view the property, undertake repairs, or inspect it in any way, the cost of travel can be deducted
• Land tax – As long as your property is tenanted, you can claim deductions for the amount of land tax you pay
• Utilities – Any utilities that your tenants didn’t pay for
• Advertising – Any costs for advertising your rental property
• Legal fees – Any legal fees incurred from managing your rental property
• Quantity Surveyor fees – If you are claiming a significant amount of depreciation, it’s recommended to obtain a quantity surveyor report and have a tax depreciation schedule put together. The cost of this can be deducted
• Body Corporate fees – The same applies to renting out a property in a body corporate. Body corporate or strata management fees are deductible
• Tax preparation – Any fees you incur from hiring an accountant to manage your investment property tax return can be claimed