What expenses can you claim of your investment property

Deduction of expenses for your residential rental property

 

Travel expenses

From 1 July 2017, investors cannot claim deductions for travel expenses relating to inspecting, maintaining, or collecting rent for your residential rental property. These changes are now law. In addition, you cannot recognise the travel expenditure in the cost base of the property for CGT (Captial Gain Tax) purposes.

However, you can continue to deduct travel expenditure if:

  • The losses or outgoings are necessarily incurred in carrying on a business for the purposes of gaining or producing assessable income; or
  • You are an excluded class of entity.

An excluded class of entity is:

  • A corporate tax entity;
  • A superannuation plan that is not a self-managed superannuation fund;
  • A public unit trust;
  • A managed investment trust; or
  • A unit trust or a partnership, members of which are entities of a type listed above.

 

Expenses you may claim for rental property

Expenses for which you may claim an immediate deduction include:Expenses on Residential Investment Property

  • Advertising for tenants
  • Body corporate fees and charges
  • Council rates
  • Water rates
  • Land tax
  • Cleaning
  • Gardening and lawn mowing
  • Pest control
  • Insurance (building, contents, public liability)
  • Interest on loan
  • Property agent’s fees and commission
  • Repairs and maintenance
  • Some legal cost

Expenses for which you may claim deductions over a number of income (financial) years:

  • Borrowing cost (not including interest, which can be deducted immediately)
  • Depreciation (decline in value of depreciating assets such as carpet, furniture, and appliances)
  • Capital works expenditure

You can also find more information on ATO about Income tax for Individuals.