Tax Deduction
Tax & Deductions
An expense you can subtract from your assessable income to reduce the amount of tax you owe.
Full Explanation
Property investors can claim deductions for expenses directly related to earning rental income. Common deductions include loan interest, council rates, insurance, property management fees, repairs, and depreciation. Deductions are claimed in your annual tax return and reduce your taxable income, not your tax dollar-for-dollar.
Example
You claim $12,000 in loan interest, $3,000 in management fees, and $2,000 in repairs, reducing your taxable rental income by $17,000.
Frequently Asked Questions
What is the difference between a repair and an improvement?
Repairs restore something to its original condition and are immediately deductible. Improvements enhance or upgrade the property beyond its original state and must be depreciated over time as capital works.
Can I claim travel to my investment property?
Since 1 July 2017, residential property investors can no longer claim travel expenses to inspect or maintain their rental property. This change does not apply to commercial property.