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
• phone
• property agent fees or commissions
• repairs and maintenance
• stationery
• travel undertaken to inspect the property or to collect the rent
• water charges.

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.