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  • Rental expenses



    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 certain 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.

    There may be situations where you need to apportion 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 actually incurred them. Some of these deductions are examined in more detail below.

    Borrowing expenses, decline in value of depreciating assets (previously known as depreciation) and capital works (special building write-off) deductions may be deducted over a number of income years.

    Expenses you are not able to claim include:

    • acquisition and disposal costs
    • 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 use of a holiday home that you rent out for part of the year.
    Last modified: 11 Dec 2019QC 16578