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Home arrow News arrow Categories arrow Accounting and Taxation arrow Rental Property Deductions
Rental Property Deductions

Many property investors are unaware of the possible deductions available to them. So, as a quick guide, we have compiled the following list of possible rental property deductions for those with investment properties.

 

  • Advertising for tenants
  • Bank charges
  • Body corporate fees
  • Borrowing expenses [loan fees, mortgage insurance, mortgage stamp duty, etc.]
  • Cleaning
  • Council rates
  • Electricity and gas
  • Gardening and Lawn Mowing
  • In-house audio/video service charges
  • Insurance [building - contents - public liability - landlords]
  • Interest on loans
  • Land tax
  • Legal expenses
  • Lease costs [preparation - registration - stamping]
  • Pest control
  • Property agent fees and commission
  • Quantity surveyor's fees
  • Repairs and maintenance
  • Replacements of; crockery, cutlery, bedding, linen, furniture and fittings under $300
  • Secretarial and bookkeeping fees
  • Security patrol fees
  • Servicing costs - such as servicing a water heater
  • Postage and stationery
  • Telephone calls and rental
  • Tax related expenses
  • Travel and car expenses incurred for: Rent collection, property inspection, maintenance
  • Water charges

Borrowing expenses, depreciation (capital allowances) on plant, and special building write-off deductions may be allowable as deductions over a number of years.

 

You can claim a deduction for these expenses only if you have actually incurred the expenditure.

 

Expenses that you are NOT able to claim include;

  • Stamp duty on conveyance of a rental property;
  • Expenses not actually incurred, such as water or electricity charges borne by tenents;
  • Expenses that are not related to rental of a property, such as expenses connected to private usage of a holiday home that is rented out for part of the year.
  • Initial repairs to property before renting. These can be used as part of the cost base of the property.

Acquisition and disposal costs

A deduction cannot be claimed for the costs of acquiring or disposing of a rental property. Examples of expenses of this kind include;

  • The purchase cost of the property;
  • Conveyancing costs; and
  • advertising expenses

However, if the property was purchased after 19 September, 1985, these costs may form part of the cost base of the property for capital gains tax purposes upon sale.