Rental property and Investment Property – Key tax deductions to claim

Rental property - key tax deductions to claim

Additional tax deductions for your Rental / Investment Property can save you significant tax and increase tax refunds.

Rental property and Investment Property - key tax deductions to claim

Below are some key tax deductions you can claim for your Rental / Investment property:

  • Interest on bank loan

    • Prepaying interest can help boost negative gearing and increase any tax refund but this must be done correctly
  • Depreciation - "the tax deduction you don't directly pay for"

    • Capital Allowances
      • construction costs - for properties built after 16 September 1987 a 2.5% deduction is allowed for construction costs (ie. $200,000 build cost = $5,000 per year tax deduction)
      • structural improvements - expenditure on or after 27 February 1992 qualifies for a 2.5% deduction
    • Depreciation on fixtures and fittings
      • For existing properties purchased before 9 May 2017  - full depreciation will apply (often between 10% to 30% per year
      • For properties purchased after 9 May 2017  - only the "first purchaser " of the assets will be entitled to claim depreciation - so only newly acquired properties or new assets qualify
    • ATO guide
      • A full list of depreciating assets that can be claimed as a tax deduction can be found on ATO summary guide "Rental Properties" pages 35 to 42 ATO Rental Properties - 2017
  • Lenders Mortgage Insurance

    • Under certain circumstances, tax deductions could be claimed for LMI under certain circumstances (check with our Experts!)
    • We can assist in claiming this tax deduction for retrospective Tax Returns even if you have missed this claim - you have not missed out on this opportunity!
  • Rates and taxes and holding cost

    • Council rates, insurance, land tax, property agent fees, repairs and maintenance, strata fees, light and power/gas

Other tax deductions to claim

There are a number of other additional tax deductions that can be claimed. The best approach is to list all expenses that you think may be tax deductible and run these past your tax professional.

Our team of tax specialists can assist you in claiming all available tax deductions for your rental property and investment property. Reach out to us for an obligation free telephone discussion.

ph: +61 8 9467 4939     –    skype: +61 8 6102 0180   –   –


Important: The above commentary is for information purposes only and does not constitute tax advice upon which you can rely. If you are seeking formal tax advice, please make contact with us. TXM Chartered Accountants provides nil warranty for any loss or damage caused as a result of relying on the above information.