What You Can Claim at Tax Time as a Property Investor

Introduction

Tax time is approaching. Are you confident you’re claiming everything you’re entitled to as a property investor?

Owning an investment property comes with a wide range of tax benefits, but many investors miss out on valuable deductions simply because they don’t know what to look for. Whether you're new to the market or expanding your portfolio, understanding what you can claim helps you maximise your return and improve your cash flow.

This guide outlines the key deductions available to property investors in Australia, with a clear breakdown of what’s claimable, what’s not and how to make the most of your property’s tax potential. 

Common Tax Deductions for Property Investors

To make things clearer, let’s break deductions into categories.

Ongoing Expenses

These are regular costs involved in managing and maintaining your property:

• Interest charged on your investment loan
• Property management and leasing agent fees
• Council rates and water charges
• Owners corporation (strata) fees
• Landlord insurance
• Advertising costs for finding new tenants
• Repairs and general maintenance (such as fixing a broken tap or replacing a damaged fence)

Note: Repairs must relate to wear and tear or damage while the property is rented. Major upgrades or improvements are treated differently.

Capital Works (Building Depreciation)

This refers to the structural parts of the building and fixed items, such as:

• Walls, ceilings, flooring and windows
• Built-in kitchen cupboards, wardrobes and bathroom fittings

These deductions fall under Division 43 of the tax legislation and are usually claimed over a 40-year period. To be eligible, the property must have been constructed after July 1985.

Plant and Equipment (Depreciating Assets)

This covers easily removable or mechanical assets like:

• Kitchen appliances
• Curtains and blinds
• Carpets and floating floors
• Air conditioning systems

These are typically claimed based on the asset’s effective life.

Important note: Since 2017, only new properties or newly installed items in existing properties are eligible for these deductions. Second-hand assets in established properties no longer qualify.

Professional and Administrative Costs

• Fees paid to accountants and registered tax agents
• Legal fees related to managing tenancies
• Loan setup, valuation and bank charges
• Subscription to record-keeping or accounting tools

Travel expenses to inspect or maintain your rental property were previously claimable but are now restricted for most residential investors.

 What You Can’t Claim

Some costs cannot be claimed immediately or at all. These include:

• Travel for personal reasons or unrelated to the rental activity
• The principal portion of your mortgage repayments (only the interest is deductible)
• Stamp duty on purchase (though it may be added to your cost base for capital gains calculations)
• Costs associated with improvements or renovations that are still in progress
• Personal use of the property or periods it was not genuinely available for rent

Don’t Overlook Depreciation Schedules

If your property is new or off-the-plan, a depreciation schedule prepared by a quantity surveyor can unlock thousands in annual deductions.

This report outlines both capital works and plant and equipment depreciation and helps your accountant claim every eligible cent.

It’s especially useful for investors in Norus Projects’ developments in Sandringham, Burwood and Ivanhoe, where high-quality finishes and new construction provide strong depreciation benefits from day one.

The best part? The cost of the schedule itself is also tax-deductible.

Tips to Maximise Your Tax Time Return

Want to keep more money in your pocket this tax season? Follow these tips:

• Keep thorough records of every expense throughout the year
• Use a spreadsheet or accounting software dedicated to your investment
• Partner with a tax accountant who specialises in property
• Review your deductions regularly, especially after renovations, tenant changes or changes in income
• Update your depreciation schedule if you upgrade appliances or fittings

Conclusion: Get the Most from Your Investment

Understanding what you can claim at tax time is one of the easiest ways to improve the performance of your investment property. With the right knowledge and a solid plan, your deductions can significantly boost your cash flow and make holding a property more affordable.

If you’re unsure whether you’re maximising your deductions, reach out to our team for guidance or request a referral to a property tax specialist.

Start the new financial year smarter, your future self will thank you.

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