Updated: Jul 21, 2021
If you own an investment property, there are many expenses that are tax deductible. It's important however to only claim deductions on your property during period during which it was tenanted or genuinely available for rent. Here's a guide to the costs you can claim at tax time.
1. Loan interest
This is the biggest expense that is tax deductible. If you have a mortgage over the investment property, the interest charged on the loan is tax deductible.
2. Rental expenses
Landlords are liable to many kinds of expenses, these are deductible in the same tax year that you paid for them.
3. Rental advertising costs
Landlords need to find tenants and often do-so through advertising. Whether its online, in print, signage etc. you can claim these expenses.
4. Council rates
Rates can be deduced in the year they are paid, but you can only claim them for the time that your house was rented out.
5. Land tax
If you have a rented dwelling on your investment property, you can use land tax as a deduction. Rules about amounts and timing differ between states so be sure to check guidelines.
6. Building depreciation
Depending on how old the property is, you may be able to claim depreciation of the building's structure. Look up the guidelines for your state and area.
7. Appliance depreciation
If you've installed dishwashers, washing machines, heating, air conditioning etc. you may be able to claim depreciation deductions.
8. Pest control
Depending on who paid for the service (i.e. tenant or landlord), the cost for hiring pest control can be deducted.
You can claim the cost of insuring your rental property, request an annual breakdown from your provider.
10. Legal Expenses
Cost for legal advice and documents relating to renting out your property are also tax deductible.
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