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Claim rental property interest correctly

Last updated 31 May 2023

Rental interest deductions are one of the most common things not claimed correctly.

If your clients bundle their rental property loan and include personal items, such as a car or holiday:

  • the interest must be apportioned for the cost of those items over the life of the loan, even if those items don’t last the length of the loan
  • they can't just repay the part of the loan relating to the private purchase, even when they refinance.

Your clients also need to apportion claims for interest expenses:

  • according to their ownership
  • if the property was rented out for part of the year
  • when only part of the property was rented out
  • if they use the property or kept it vacant for themselves
  • if it's rented at below market rates.

Make sure you ask your clients the right questions.

Check out more tips and share our Investors toolkit factsheet about Interest expenses with your clients.