Owning a rental property comes with its fair share of expenses—but many of them can be claimed at tax time. Knowing what you can deduct not only helps you stay compliant with the ATO, but also gives your cash flow a healthy boost.

Here’s a practical, easy-to-follow guide to the most common claimable expenses for property investors.

Day-to-Day Running Costs

Let’s start with the basics—these are the recurring or operational expenses you’re likely already paying to keep your property in good shape and rented.

• Advertising for Tenants
  Costs to promote your property—whether online, in print, or through an agent—are fully deductible.
• Council Rates
  You can claim local council charges and emergency services levies for the time your property is rented or available for rent.
• Insurance Premiums
  Landlord insurance, building insurance, and contents insurance are all claimable. If you prepay your policy, you can still claim it in the same year.
• Property Management Fees
  Whether it’s a full-service agency or just tenant placement, property management costs are deductible, including lease renewal and inspection fees.
• Cleaning and Gardening
  If you pay for professional cleaning (between tenants or ongoing) or gardening and lawn maintenance that’s included in your lease agreement, those costs are claimable.
• Pest Control
  Expenses for professional pest treatments are deductible if you’re responsible under the lease.
• Water and Utilities
  If you pay for water, electricity, gas, or internet as part of the rental agreement, these are deductible too.

For a more detailed guidance on how to calculate your claims, please visit the Australian Taxation Office website.

Loan and Finance-Related Deductions

Own your property with the help of a loan? There are several finance-related expenses you can claim—just make sure they’re linked directly to your investment property.

• Loan Interest
  You can claim the interest on your investment loan—but not the principal repayments. If your loan was used to buy a rental property and something else, such as a car, you can’t just repay the part relating to your personal purchase, even when you refinance. All loan repayments are apportioned across both purposes until all the loan has been repaid and you are no longer claiming interest expenses for that property.
• Borrowing Expenses
  Administrative costs like break fees, discharge fees, or loan setup costs are also deductible, either immediately or over the life of the loan.
• Land Tax
  If your investment property is above the threshold for land tax in your state or territory, this annual charge is deductible during the rental period.

Keeping the Property in Shape

Making sure your property is safe, livable, and well-maintained? Here are some upkeep-related expenses you can claim.

Repairs and Maintenance
You can claim repairs that restore the property to its original condition (like fixing a broken fence or replacing a cracked tile). General upkeep (like varnishing a deck or repainting) is also deductible.

Note: Major improvements or upgrades—like adding a new bathroom—aren’t immediately deductible. These are capital works deductions, which are claimed over time.

Depreciation and Long-Term Deductions

Not all deductions involve actual spending. Some of the biggest tax savings come from the natural wear and tear of your property and its contents.

• Capital Works deductions
  This covers structural elements like walls, flooring, doors, roofing, and even extensions. It’s generally claimed at 2.5% per year over 40 years.
• Depreciating Assets
  You can claim the decline in value of fixtures and fittings like ovens, carpets, blinds, or hot water systems. These are deducted over their useful life based on ATO rates.

Quick Tip: Instant deduction for items costing $300 or less in depreciating assets

If an item costs $300 or less (and isn’t part of a larger set), you may be able to claim the full cost in the year of purchase.

Depreciation Schedule Cost
A tax depreciation schedule prepared by a quantity surveyor helps identify all claimable items. The cost of this report is actually deductible under immediate deduction.

Professional Services and Admin

Staying on top of the paperwork? These admin and compliance-related costs can be claimed too.

• Accounting Fees
  Fees paid to your accountant for preparing your tax return, keeping rental records, or offering investment advice are all deductible.
• Legal Fees (Rental-Related)
  Legal costs related to rental matters—such as evictions, tenancy disputes, or recovering unpaid rent—are deductible. Legal costs for buying or selling the property are not.

When Can You Claim These Deductions?

Not all deductions work the same way. Here’s a quick breakdown of timing:

Claimed Immediately (Same Financial Year)

These expenses are typically claimed in full in the year they are incurred:

• Advertising for tenants

• Council rates

• Insurance premiums

• Property management fees

• Cleaning, gardening, and pest control

• Utilities and water (if paid by the landlord)

• Loan interest

• Land tax

• Repairs and general maintenance

• Accounting fees

• Legal fees (rental-related)

• Depreciation schedule cost

Claimed Over Time

These deductions spread across multiple years:

• Borrowing Expenses – typically over 5 years or the loan term

• Capital works depreciation – generally 2.5% per year over 40 years

• Depreciating assets – based on ATO’s effective life guidelines

At MKG Partners, our professional accountants help clients identify which rental property expenses are deductible and ensure they’re claimed correctly. Our goal is to make the process clear, accurate, and fully compliant—so you can approach tax time with confidence.