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Claiming Rental Expenses On Your Investment

There are three categories of rental expenses you will encounter when you own and maintain an investment property. This month, I will break down (in detail) some examples of the kind of deductions you can to expect to encounter.

Expenses you can claim immediately include:

  • Bank and some mortgage charges

  • Body Corporate fees and charges

  • Advertising costs (when you are seeking a tenant)

  • Cleaning expenses

  • Electricity and gas (whilst property is vacant or being renovated)

  • Gardening and lawn care

  • Council Rates

  • Insurances, building contents, public liability and landlord cover (tenant default)

  • Interest charged on loans associated with the premises

  • Land tax

  • Bookkeeping and Accounting fees

  • Agent fees and charges (as noted on your rental management agreement)

  • Legal expenses (with the exception of costs highlighted above)

  • Pest control

  • General Repairs and maintenance

  • Travel and car expenses (e.g. if you are visiting your investment property)

Expenses deductible over a number of income years:

  • These deductions include; borrowing expenses including loan establishment fees, mortgage broker fees, stamp duty on your mortgage and mortgage insurance.

  • Capital works deductions decline in value of depreciating assets. These items may include building and extensions, adding a patio, pergola or garage, fencing, retaining walls and structural repairs.

  • Your capital work or improvement claim is highest in the first year, with the deduction becoming less and less with each subsequent year until no depreciation is left.

Expenses you cannot claim:

  • Any expenses not incurred by you e.g. water or electricity usage charges borne by your tenant.

  • Expenses that are not related to the rental property itself. This may include expenses relating to your own use of your investment e.g. in the event that you own a holiday home or investment property and stay in it for part or the year. If your investment has been used for personal usage at any stage, you must declare any usage and deductions for this period. This will be deducted from your total taxable claim.

  • Travel expenses incurred before you buy, to help you rent out or buy an investment property

  • Acquisition and disposal costs of the property. This includes conveyancing costs, stamp duty and transfer fees. These particular expenses can however effect and be offset by any Capital Gains Tax you may be charged upon the event of a sale.

Lisa Black is a licensed Real Estate Agent with 17 years local area experience. She can assist with any of your real estate needs and can be contacted on 0421 591 401 or visit


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