Rental properties 2008 will help you, as an owner of rental property in Australia determine:

  • which rental income is assessable for tax purposes
  • which expenses are allowable deductions
  • which records you need to keep, and
  • what you need to know when you sell your rental property.

Many, but not all, of the expenses associated with rental properties will be deductible. This guide explains:

  • how to apportion your expenses if only part of them are tax deductible
  • what expenses are not deductible, and
  • when you can claim those expenses that are deductible - some you can claim in the year they occur; others must be claimed over a number of years (including decline in value of depreciating assets and capital works expenses).

When you own a rental property, you may also need to know about capital gains and goods and services taxes, negative gearing, pay as you go (PAYG) instalments and the effects of the general value shifting regime. This guide explains these at Other tax considerations.

What's new



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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For depreciating assets you started to hold on or after 10 May 2006, you will generally use a new rate of 200% when calculating decline in value deductions using the diminishing value method for an explanation on how to calculate depreciation under the diminishing value method for assets acquired on or after 10 May 2006 and for assets acquired prior to that date.


Small business tax changes

New streamlined provisions for small business entities have replaced the former simplified tax system (STS). Broadly, to use the simplified taxation rules a small business entity must carry on business and have an aggregated turnover of less than $2 million. For more information, see Guide to concessions for small business entities (NAT 71874).

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Publications and services

To find out how to get a publication referred to in this guide and for information about our other services, see More information.

Is your rental property outside Australia?

If your property is located outside Australia special rules apply to the deductibility of your rental property expenses. Question 20 in TaxPack 2008 supplement (NAT 2677) contains further information on foreign source income. If you are unsure of your obligations, contact your recognised tax adviser or us.



The examples given in this publication featuring Mr and Mrs Hitchman are based on the assumption that the Hitchmans own their rental properties as joint tenants who are not carrying on a rental property business.

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Last modified: 30 Jun 2009QC 27913