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Legal fees

Last updated 28 August 2019

Some legal expenses incurred in producing your rental income are deductible. These include the costs of:

  • evicting a non-paying tenant
  • taking court action for loss of rental income
  • defending damages claims for injuries suffered by a third party on your rental property.

Most legal expenses, however, are of a capital nature and are therefore not deductible. These include costs of:

  • purchasing or selling your property
  • resisting land resumption
  • defending your title to the property.

For more information, see Expenses you can claim.

Non-deductible legal expenses which are capital in nature may, however, form part of the cost base of your property for capital gains tax purposes.

See also: