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  • Expenses for which you can claim an immediate deduction



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Expenses for which you may be entitled to an immediate deduction in the income year you incur the expense include:

    • advertising for tenants
    • bank charges
    • body corporate fees and charges
    • cleaning
    • council rates
    • electricity and gas
      • annual power guarantee fees
    • gardening and lawn mowing
    • in-house audio/video service charges
    • insurance
      • building
      • contents
      • public liability
    • interest on loans
    • land tax
    • lease document expenses
      • preparation
      • registration
      • stamp duty
    • legal expenses (excluding acquisition costs and borrowing costs)
    • mortgage discharge expenses
    • pest control
    • property agents fees and commissions (including prior to the property being available to rent)
    • expenses incurred in attending property investment seminars to improve the performance of a current income producing property
    • quantity surveyor’s fees
    • costs incurred in relocating tenants into temporary accommodation if the property is unfit to occupy for a period of time
    • repairs and maintenance
      • cost of a defective building works report in connection to repairs and maintenance conducted
    • secretarial and bookkeeping fees
    • security patrol fees
    • servicing costs, for example, 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 incur them and they are not paid by the tenant.

    In the 2017 budget, the government announced its intention to:

    • disallow the deduction of travel expenses for residential rental property, and
    • limit plant and equipment depreciation deductions to outlays actually incurred by you.

    These proposed changes would come into effect on 1 July 2017 for your 2017-18 tax return. For more information on the progress of these changes, see New legislation.

    Expenses prior to property being available for rent

    You can claim expenditure such as interest on loans, local council, water and sewerage rates, land taxes and emergency services levy on land you have purchased to build a rental property or incurred during renovations to a property you intend to rent out. However, you cannot claim deductions from the time your intention changes, for example if you decide to use the property for private purposes.

      Last modified: 22 Aug 2017QC 51264