ato logo
Search Suggestion:

Rental properties 2005-06

A guide on how to treat rental income and expenses, including how to treat residential rental property assets and items.

Last updated 25 March 2020

This publication can be downloaded in Portable Document Format (PDF): download Rental properties 2005-06 (PDF, 646KB)This link will download a file.


Rental properties 2006 will help owners of rental properties in Australia determine:

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

Many of the expenses associated with your rental property will be deductible. We explain:

  • 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 instalments and the effects of the general value shifting regime; see Other tax considerations.

What's new

Table 6, which deals with evaporative coolers, has been added to the tables that outline the treatment of certain residential rental property items as depreciating assets or capital works.

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 19 in TaxPack 2006 supplement contains further information on foreign source income. If you are unsure of your obligations, contact your recognised tax adviser or the Tax Office.


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.