Property Guide
Property Investor Tax Deduction Guide
An overview of deductions, depreciation, and capital gains considerations for Australian property investors.
General Information Only. This guide is intended as general information and does not constitute financial, tax, or legal advice. Property investment outcomes vary greatly depending on individual circumstances — please consult our team before acting on any information in this guide.
Deductible Expenses for Rental Properties
- Loan interest on the investment property mortgage
- Property management fees charged by your agent
- Council rates, water rates, and land tax
- Building and landlord insurance premiums
- Repairs and maintenance to keep the property in its current condition
- Advertising costs for finding tenants
- Accounting and tax agent fees relating to your investment
- Stationery, postage, and phone costs directly related to managing the property
Depreciation: A Commonly Missed Deduction
- Division 43 (Building Allowance) applies to the structural component of qualifying buildings
- Division 40 (Plant and Equipment) covers removable assets such as appliances, carpets, and blinds
- A Quantity Surveyor report is typically required to establish the depreciation schedule
- Properties built after 1985 are generally eligible for Division 43 deductions
- Second-hand residential properties purchased after 9 May 2017 have restricted plant and equipment depreciation
- Depreciation can significantly reduce your taxable income without any cash outlay
Capital Gains Tax (CGT) Considerations
- Capital gains are included in your assessable income in the year the property is sold
- Properties held for more than 12 months are eligible for the 50% CGT discount for individuals
- The cost base includes purchase price, stamp duty, legal fees, and capital improvements
- Selling costs such as agent commissions can also be added to the cost base
- Partial exemptions may apply if the property was used as your main residence at any point
- CGT events can also be triggered by changes in ownership structure or use
Negative Gearing: What It Means
- Negative gearing occurs when your rental expenses exceed your rental income
- The net rental loss can be offset against your other income, reducing your overall tax
- This is a common strategy in Australia but it does not guarantee long-term profitability
- Positive gearing means the property earns more than it costs — this income is taxable
- Your overall investment strategy should be guided by your personal financial goals
Maximise your investment property deductions
Our property tax specialists can review your portfolio, prepare your depreciation schedule, and ensure you're claiming everything you're entitled to.
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