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.
Despite the October 2021 changes, there are still many expenses you can claim.
Council rates related to your investment property and the total cost of insuring it can be claimed.
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.
|Date interest expenses incurred||Percent of the interest that can be claimed|
|April 2020 – 31 March 2021||100%|
|April 2021 – 30 September 2021||100%|
|1 October 2021 – 31 March 2022||75%|
|1 April 2022 – 31 March 2023||75%|
|1 April 2023 – 31 March 2024||50%|
|1 April 2024 – 31 March 2025||25%|
|1 April 2025 onwards||0%|
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).
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.
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.
Additional rental income generating costs you may be able to claim include:
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.