What expenses can you claim as a rental property owner?

Operating your investment property as a business means claiming tax deductions for all related expenses. What you can and can’t claim changed on 1 October 2021, so, let’s dive in and see which expenses you can still claim.

Rental property expenses you can claim

Despite the October 2021 changes, there are still many expenses you can claim.

Insurance and Rates

Council rates related to your investment property and the total cost of insuring it can be claimed.

Interest — tax deduction loophole closing

Since 1 October 2021, landlords haven’t been able to deduct interest on new loans used to purchase existing rental properties (this does not apply to newly built rentals).

However, interest can still be deducted on loans used to buy existing rental properties prior to 27 March 2021. The amount of interest landlords can claim on these purchases will be phased out by April 2025, as detailed below.

Fees and commission

The fees or commission you pay to property managers who take care of the tenancy for you can be claimed in full. If a property manager is used only for select services while you manage the property yourself, you can claim 100% of these services (e.g., consulting, inspection, or tenant vetting services).

Accountant fees

While you can’t claim for accountant fees related to the initial set-up of your investment property, you can claim the fees your account charges to manage your accounts, prepare tax returns, and provide consulting services.

Repairs and maintenance costs

General maintenance and repair work carried out on your investment property can be claimed in full. In the case that you complete the work yourself, you can’t claim for your time, but you can claim for all materials used.

Examples of repairs and maintenance you can potentially claim for include the likes of repairing a crack in your wall, replacing a blown hot water cylinder element, and replacing a broken item like a tap or shower head.

Other expenses you can claim

Additional rental income generating costs you may be able to claim include:

• Travel to and from your rental property
• Valuation fees
• Body corporate fees (if applicable)
• Gifts for tenants
• Depreciation (to cover costs of wear and tear and general ageing of furniture and fittings purchased for your rental property)

Rental property expenses you can’t claim

There are a number of things you can’t claim for, such as GST, substantial repairs and upgrades that will significantly improve your rental property, and initial set-up costs.

To learn more about these expenses you can’t claim for and those you can, check out our free guide, which is also packed with helpful investment information, or get in touch for an informal chat.

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