Expenses deductible immediately - management and maintenance including interest
You can generally claim an immediate deduction (that is, against your current year's income) for your expenses related to the management and maintenance of the property, including interest on loans.
If your property is negatively geared you may be able to deduct the full amount of rental expenses against your rental and other income, such as salary and wages and business income.
To claim deductions for expenses, your property must include a dwelling that is rented or available for rent – for example, advertised for rent. If you're building a rental dwelling, you can claim deductions for the land while you are building.
Expenses for which you may be entitled to claim an immediate deduction include:
- advertising for tenants
- body corporate fees and charges
- council rates
- water charges
- land tax
- gardening and lawn mowing
- pest control
- insurance (building, contents, public liability)
- interest expenses
- property agent's fees and commission
- repairs and maintenance
- travel undertaken to inspect the property, to collect the rent or for maintenance.
A rental property is negatively geared where the deductible expenses (including interest on the loan borrowed to finance the property) exceeds the income earned from the property.
The overall tax result of a negatively geared property is a net rental loss. In this case, you may be able to claim a deduction for the full amount of rental expenses against your rental and other income – such as salary, wages or business income – when you complete your tax return for the relevant income year. Where the other income is not sufficient to absorb the loss it's carried forward to the next income year.
You can generally claim an immediate deduction for expenses related to the management and maintenance of the property, including interest on loans.