Make Tax Time Count: Smart Tips for Property Investors
Tax time might not be everyone’s favorite season — but if you own an investment property, it’s a golden opportunity to get your finances in order, maximize your deductions, and plan ahead with purpose.
Here are some practical strategies to help you make the most of your return and start the new financial year on the right foot.
Understand What You Can (and Can’t) Claim
The Australian Taxation Office (ATO) categorises rental property deductions into three main groups:
Immediately deductible expenses
- These can be claimed in full in the income year they’re incurred. Examples include:
- Interest on investment loans
- Council rates and water charges
- Pest control services
- Insurance premiums
- Repairs and maintenance
- Depreciating assets costing $300 or less
- Deductions claimed over time
Some expenses must be spread over several years, such as:
- Borrowing expenses (e.g. loan application or establishment fees)
- Capital works (e.g. renovations, extensions, structural improvements)
- Decline in value of depreciating assets (e.g. appliances, carpets, blinds)
- Non-deductible expenses
These include:
- Personal use of the property (such as staying in it yourself)
- Some second-hand depreciating assets purchased after 9 May 2017
- Certain capital expenditures that aren’t eligible for depreciation
Apportion Expenses Accurately
Do you use your property for both personal and rental purposes? Or only rent out part of it — like a room or granny flat? Maybe it’s listed on Airbnb part-time?
If so, it’s essential to split your expenses between personal and income-producing use. The same applies if the property is rented below market rates.
Incorrectly apportioning expenses can lead to errors in your tax return — including over-claiming, which may raise red flags with the ATO. Check the ATO’s rental property guide for help on how to apportion correctly.
Don’t Miss Multi-Year Deductions
While some costs are deductible upfront, others need to be claimed gradually. These include:
- Borrowing expenses such as loan application and legal fees — typically claimed over five years or the life of the loan (whichever is shorter). Borrowing costs under $100 can be claimed in full in the year you incur them.
- Capital works deductions for things like building renovations, structural changes, or improvements can be claimed over 40 years in most cases.
- Depreciating assets like dishwashers, carpets, or air conditioners can be claimed based on their decline in value each year. A quantity surveyor can prepare a depreciation schedule to help you get it right.
Book Repairs Before 30 June
If you’ve been putting off essential maintenance, try to complete it before the end of the financial year to claim it this tax season.
Common deductible repairs include:
- Replacing broken fixtures
- Fixing faulty locks or doors
- General plumbing or electrical repairs
- Servicing smoke alarms
- Professional pest control
Just remember — repairs are deductible, but improvements or upgrades are considered capital works and must be claimed over time.
Don’t Overlook Loan and Insurance Costs
Finance-related expenses can often be claimed as well, such as:
- Interest on investment loans
- Loan account-keeping fees
- Bank charges and borrowing costs
- Insurance premiums (building, contents, landlord, loss of rent, etc.)
Keeping accurate records is essential, so be sure to retain all receipts and statements.
EOFY Property Investor Checklist
Here’s a quick recap:
✔ Know what you can claim now vs. over several years
✔ Split expenses correctly for short-term or part-use rentals
✔ Review borrowing costs and depreciation
✔ Finalise repairs before 30 June
✔ Claim eligible interest and insurance expenses
✔ Keep detailed records and receipts
Let’s Plan Ahead — Together
Tax time isn’t just about ticking boxes — it’s a chance to look at the big picture and plan for the year ahead. While your accountant can help with the tax side of things, we’re here to support your finance goals.
Whether you want to review your current investment loan, explore refinancing, or secure finance for your next property — let’s chat.
Get in touch today and set yourself up for a stronger, smarter financial year.
Disclaimer: This blog offers general information on mortgages and finance for informational purposes only. It is not a substitute for personalized advice from a qualified mortgage professional or financial advisor. Use your discretion and seek professional guidance based on your individual circumstances.
