Rental property expenses

What you can claim

You can claim expenses relating to your rental property but only for the period your property was rented or available for rent – for example, advertised for rent.

Expenses could include:

• advertising for tenants
• bank charges
• body corporate fees
• borrowing expenses
• capital works
• council rates
• decline in value of depreciating assets
• gardening and lawn mowing
• insurance
• interest expenses
• land tax
• legal expenses
• pest control
• property agent fees or commissions
• repairs and maintenance
• stationery
• phone
• water charges, and
• travel undertaken to inspect the property or to collect the rent.

If part of your property is used to earn rent, you can claim expenses relating to only that part of the property. You will need to work out a reasonable basis to apportion the claim.

Example

Gerard’s private residence includes a second storey which he rented out. The second storey represents 30% of the total floor area of the house. Gerard also shared the laundry with his tenant. The laundry takes up 10% of the total floor area of the house. If half is a reasonable figure for use of the laundry by the tenant, Gerard can claim 35% of the expenses for the property – that is:

30% + (1/2 x 10%) = 35%.

Taxation ruling IT 2167 - Income tax: rental properties - non-economic rental, holiday home, share of residence, etc. cases, family trust cases will give you more details about apportionment.

Last Modified: Tuesday, 30 June 2009