Advertising for Tenants

Any cost you incur to market your property when it becomes vacant, such as online listings through platforms such as realestate.com.au and domain.com.au, signage or a real estate agency, can be claimed. Keeping your property tenanted is essential to maximising profitability in the long term, and claiming these advertising costs helps you efficiently manage your investment.

Body Corporate Fees

In some circumstances, rental property owners may be able to claim a tax deduction for the body corporate fees and charges as part of a strata scheme. Not all payments are deductible in the income year you incur them. Regular fees paid to the administration fund or general purpose sinking fund for ongoing administration and general maintenance (such as insurance, garden maintenance and management) can be claimed as an immediate deduction at the time you incur them.

However, special levies for capital improvements (such as major repairs or upgrades) are not immediately deductible. For these capital improvements, you may instead be able to claim a capital works deduction for the cost of capital improvements or repairs once the work has been completed. 

Council Rates, Water Charges & Land Tax

If you’re paying council rates, water charges or land tax on your property as a rental owner, these costs are generally tax-deductible. As long as the property is currently rented or genuinely available for rent, you can claim these expenses in the year they’re incurred. 

Cleaning, Gardening & Lawn Mowing

Maintaining your rental property’s presentation isn’t just good practice to keep tenants happy, it can also be an important tax deduction for rental property owners. As these costs are recurring and straightforward to deduct, these are an essential tax deduction every rental property owner should know about. 

Pest Control

As Queensland property managers, we understand how important it is to carry out pest control year-round to keep them at bay. Whether it’s termites, ants or spiders, routine pest control is essential for any rental property owner. Thankfully, pest control is tax-deductible expenses and can be claimed in full. 

Insurance

Insurance is essential for all rental property owners, and is an undeniably important tax deduction. You can claim the cost of building, contents, public liability and loss of rent cover. 

Interest Expenses

If you have a loan associated with your rental property, you may be eligible to claim the interest portion of your repayments. Though this is a common deduction for property investors, it is important to understand the eligibility rules, click here to learn more about claiming interest expenses. 

Prepaid Expenses

If you’re paying for certain expenses in advance, such as insurance, you may be able to claim them as a deduction in the year you pay them. You can generally claim an immediate deduction in the income year you make the prepayment for:

• Expenses of less than $1000
• Expenses of $1,000 or more where the eligible service period is 12 months or less and ends in the next income year
  
  

For more information, head to the ATO website to understand deductions for prepaid expenses. 

Repairs and Maintenance

Immediate repairs that you have to make to your rental property, such as fixing leaking taps or replacing broken tiles, are deductible in full in the year the expense is incurred. These expenses are costs incurred to keep your property in a tenantable condition, or fixing wear and tear that occurs while you rent out your property. To understand the distinction between repairs and improvements, the ATO provides a concise overview of how to distinguish between the two. 

Legal Expenses

Legal expenses for rental property owners are costs you incur to prepare, register, protect and manage your rental property. You can claim the cost of the following as deductions:

• Evicting a non-paying tenant
• Expenses for taking court action for loss of rental income
• Defending a claim for damages from injuries suffered by a third party on your rental property

However, any legal costs associated with purchasing or selling your rental property are not deductible. Always consult your financial advisor or accountant to confirm which legal expenses are deductible.