What You Can and Can’t Claim as a Landlord at Tax Time
With tax time rolling around, every smart landlord wants to make the most of their investment property deductions. But it can be confusing to know exactly what the ATO allows—and where the line is drawn.
To help you stay compliant and maximise your return, here’s a clear breakdown of what you can and can’t claim as a landlord this financial year.
What You Can Claim
Let’s start with the good news: there are plenty of legitimate expenses you can deduct from your rental income to reduce your taxable income.
1. Ongoing Rental Property Expenses
These are the regular costs of owning and managing a rental property, including:
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Property management fees
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Advertising for tenants
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Council and water rates
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Strata/body corporate fees
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Landlord insurance premiums
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Repairs and maintenance (e.g. fixing a leaking tap or replacing a broken light)
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Loan interest (not the principal component)
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Pest control
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Cleaning between tenancies
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Legal expenses related to evicting tenants or recovering unpaid rent
2. Immediate Repairs (Not Improvements)
You can claim costs for repairing damage caused by wear and tear or unexpected events—for example:
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Fixing a fence after storm damage
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Replacing cracked tiles
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Servicing a hot water system
But be careful—upgrades and improvements are treated differently (see below).
3. Depreciation
If your property is relatively new, or you’ve recently replaced fixtures or fittings, you may be able to claim depreciation. This includes:
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Capital works deductions (e.g. for structural improvements)
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Depreciable assets (e.g. appliances, carpets, blinds)
You’ll need a tax depreciation schedule prepared by a qualified quantity surveyor to claim these deductions accurately.
4. Administration & Professional Services
These include:
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Accountant or tax agent fees
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Bookkeeping software
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Phone and internet expenses (proportion related to managing the property)
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Travel for property inspections (only for commercial property—residential travel claims are no longer allowed, see below)
What You Can’t Claim
Not everything related to your rental property can be deducted—here’s what the ATO says is off-limits.
1. Personal Expenses
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You can’t claim costs for time spent managing your property if you do it yourself
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You also can’t claim clothes worn while doing inspections, or meals, unless directly related to commercial property travel
2. Travel for Residential Property
Since July 2017, you cannot claim travel expenses for inspecting, maintaining, or collecting rent for residential rental properties. This includes flights, accommodation, and fuel.
📌 This rule does not apply to commercial properties or landlords carrying on a property business.
3. Borrowing Costs Over $100 (Upfront)
If you’ve paid borrowing costs (like loan establishment fees, mortgage broker fees, stamp duty on loan documents), you can’t claim them all at once. Instead, they must be deducted over five years or the term of the loan—whichever is shorter.
4. Capital Improvements (Upgrades or Renovations)
Unlike repairs, capital improvements must be depreciated over time and can’t be claimed as an immediate deduction. This includes:
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Renovating a bathroom or kitchen
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Adding a deck or pergola
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Installing a new air conditioner (unless replacing a broken one with a like-for-like model)
These may still be deductible, but only through depreciation.
The Golden Rule: Repairs vs Improvements
A repair restores something to its original condition.
An improvement upgrades or enhances the property’s value.
👉 Example: Fixing a broken oven = repair (deductible now).
👉 Replacing it with a high-end, self-cleaning oven = improvement (deductible over time).
Need Help Claiming the Right Things?
As property managers, we can help ensure your records are in order—and refer you to trusted professionals for tax advice, quantity surveyors, or depreciation schedules.
🔗 Get in touch with our team if you’d like help understanding your investment’s potential.