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  • Rental expenses

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    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    You can claim a deduction for some of the expenses you incur for the period your property is rented or is available for rent. However, you cannot claim expenses of a capital or private nature.

    When you claim a deduction for expenses incurred in gaining your gross assessable rental income, there may be situations where the expenses need to be apportioned between deductible and non-deductible expenses. Examples include:

    • If the property is not available for rent for the full year, you may need to apportion some of the expenses on a time basis.
    • If only part of the property is used to earn rent, you can claim only that part of the expenses that relates to the rental income. As a general guide, apportionment should be made on a floor area basis-that is, by reference to the floor area of that part of the residence solely occupied by the tenant, together with a reasonable figure for tenant access to the general living areas, including garage and outdoor areas.
    • If you combine travel to inspect or maintain your rental property with travel for private purposes, you may need to apportion your travel expenses.

    Expenses that you may be able to claim include:

    • advertising for tenants
    • bank charges
    • body corporate fees
    • cleaning
    • council rates
    • electricity and gas
    • gardening and lawn mowing
    • in-house audio/video service charges
    • insurance:
      • building
      • contents
      • public liability
       
    • interest on loans
    • land tax
    • legal expenses
    • lease costs:
      • preparation
      • registration
      • stamping
       
    • pest control
    • property agent's fees and commission
    • quantity surveyor's fees
    • repairs and maintenance
    • secretarial and bookkeeping fees
    • security patrol fees
    • servicing costs-such as servicing a water heater
    • stationery and postage
    • telephone calls and rental
    • tax-related expenses
    • travel and car expenses:
      • rent collection
      • inspection of property
      • maintenance of property
       
    • water charges.

    You can claim a deduction for these expenses only if you have actually incurred the expenditure. Some of these deductions are examined in more detail below.

    Borrowing expenses, depreciation on plant and capital works deductions (special building write-off deductions) may be allowable as deductions over a number of income years.

    Expenses that you are not able to claim include:

    • stamp duty on conveyance of a rental property
    • expenses not actually incurred by you such as water or electricity charges borne by your tenants
    • expenses that are not related to rental of a property, such as expenses connected to your own usage of a holiday home that you rent out for part of the year.
    Last modified: 28 Jul 2003QC 16187