Investment Property Tax Deductions in Western Australia
Last updated: 2026 · Financial year 2025-26
A comprehensive guide to every tax deduction available to WA property investors, including WA-specific land tax rules, depreciation claims, and ATO record-keeping requirements.
Common Deductions for WA Investors
These deductions are available to all Australian property investors under ATO rules, regardless of which state or territory the property is located in.
Loan interest
Interest on your investment property loan is your single largest deduction. This includes interest on the original purchase loan and any loans for capital improvements.
Property management fees
Fees paid to a property manager for tenant sourcing, rent collection, inspections, and ongoing management.
Council rates
Local council rates are fully deductible for investment properties in the financial year they are paid.
Water rates and charges
Water supply charges and usage (where the landlord pays) are deductible.
Insurance premiums
Landlord insurance, building insurance, and contents insurance for the rental property.
Repairs and maintenance
Costs to repair or maintain the property in its current condition (not improvements). Includes plumbing, electrical, painting, and pest control.
Body corporate / strata fees
Quarterly strata levies for apartments and townhouses, including special levies for repairs (but not capital improvements to common property).
Land tax
Annual state land tax is fully deductible against your rental income in the year it is paid.
Advertising for tenants
Costs of advertising the property for rent, including online listings and signage.
Legal expenses
Legal costs related to tenant disputes, lease preparation, and eviction proceedings.
Travel to property (limited)
Travel costs to inspect the property, collect rent, or carry out maintenance. Note: the ATO scrutinises travel deductions closely since 2017 changes.
Depreciation — Division 40 (plant & equipment)
Deductions for the decline in value of removable assets like carpets, blinds, hot water systems, air conditioners, and appliances.
Depreciation — Division 43 (capital works)
Deductions for the building structure itself. Residential buildings constructed after 15 September 1987 qualify for a 2.5% annual deduction on construction costs.
Tax agent and quantity surveyor fees
The cost of preparing your tax return (the investment property portion) and obtaining a depreciation schedule from a quantity surveyor.
WA-Specific Considerations
Key rules and factors that apply specifically to investment properties in Western Australia. Managed by RevenueWA.
WA assesses land tax as at 30 June, the same as Queensland.
WA does not currently have a vacant property tax or COVID-related land tax surcharges.
Perth's relatively affordable property market (compared to Sydney and Melbourne) combined with strong mining sector employment creates solid rental demand in many suburbs.
WA has its own residential tenancy laws — the Residential Tenancies Act 1987 is different from eastern state legislation. Bond limits and notice periods differ from other states.
The Keystart home loan scheme is for owner-occupiers only and does not benefit investors, but it does increase demand for rentals among those not yet eligible.
Land Tax in Western Australia
Rate
0.25% to 2.67% on a progressive scale
Rate Brackets
- •Tax-free threshold of $300,000
- •$300,001 to $420,000: 0.25%
- •$420,001 to $1,000,000: $300 + 0.9% of excess over $420,000
- •$1,000,001 to $1,800,000: $5,520 + 1.8% of excess
- •$1,800,001 to $5,000,000: $19,920 + 2.5% of excess
- •Above $5,000,000: $99,920 + 2.67% of excess
- •Assessed on total landholdings as at 30 June
Land tax is fully deductible against your rental income for investment properties. Use our Land Tax Calculator to calculate your exact land tax across all states.
Stamp Duty in Western Australia
Western Australia charges transfer duty on property purchases. WA has relatively moderate stamp duty rates compared to the eastern states.
- •Up to $120,000: 1.9%
- •$120,001 to $150,000: $2,280 + 2.85% of excess
- •$150,001 to $360,000: $3,135 + 3.80% of excess
- •$360,001 to $725,000: $11,115 + 4.75% of excess
- •Over $725,000: $28,453 + 5.15% of excess
- •7% surcharge for foreign purchasers
- •No first home buyer concessions for investment properties
Stamp duty is not an annual deduction but forms part of your CGT cost base. Use our Stamp Duty Calculator to estimate your upfront costs.
Depreciation Claims
Depreciation is one of the most powerful (and often overlooked) deductions for property investors. It allows you to claim the decline in value of the building and its fittings without spending any additional money.
Covers the building structure itself — walls, roof, floors, fixed cupboards, doors, and windows.
- 2.5% per year of original construction cost
- Applies to buildings constructed after 15 September 1987
- Claimed over 40 years
- Must have a quantity surveyor's report
Covers removable assets and fittings — items that are not permanently fixed to the structure.
- Carpets, blinds, curtains (typical life: 8-10 years)
- Hot water systems, air conditioners (10-20 years)
- Ovens, cooktops, dishwashers (12-15 years)
- Available regardless of building age
Important for WA investors: Since March 2017, Division 40 deductions for previously used plant and equipment in second-hand residential properties are no longer available to the new owner. You can only claim Division 40 on items you purchase and install yourself. Division 43 capital works deductions are unaffected by this change.
Estimate your depreciation claims with our Depreciation Estimator.
Record Keeping Requirements
The ATO requires all property investors to maintain accurate records to substantiate deduction claims. Failure to keep adequate records can result in disallowed deductions and penalties.
Retention period
Keep records for at least 5 years from the date you lodge your tax return. For CGT purposes, keep records for the entire period of ownership plus 5 years after disposal.
Rental income
Bank statements, rental ledgers, and property management statements showing all rental income received.
Expenses
Receipts, invoices, and bank statements for all deductible expenses including repairs, insurance, management fees, and council rates.
Loan records
Annual loan statements showing interest charged. If the loan was refinanced or redraw used for personal purposes, keep records to show the investment portion.
Depreciation
A tax depreciation schedule prepared by a qualified quantity surveyor, plus receipts for any new plant and equipment you install.
Capital improvements
Receipts for renovations, additions, and improvements (not repairs). These are not immediately deductible but form part of your CGT cost base.
WA-specific records
Keep your RevenueWA land tax assessments, stamp duty receipts, and any state-specific levy notices (e.g., emergency services levies, water authority charges).
Frequently Asked Questions
The land tax threshold in Western Australia is $300,000. If the total unimproved value of all your investment land in WA is below $300,000, you pay no land tax.
WA does not currently impose an additional land tax surcharge on foreign owners, unlike NSW, VIC, and QLD. However, a 7% stamp duty surcharge applies to foreign purchasers.
All standard ATO deductions apply: loan interest, management fees, insurance, repairs, council rates, water rates, depreciation (Division 40 and 43), land tax, and advertising. These are federal deductions that apply the same way in every state.
WA has seen strong capital growth and rental yield improvements since 2023, driven by mining sector demand and interstate migration. Perth median house prices remain below Sydney and Melbourne, offering higher gross yields. However, WA markets can be cyclical — research individual suburbs carefully.
Engage a qualified quantity surveyor (QS) to inspect your property and prepare a tax depreciation schedule. The QS fee (typically $600-$800) is itself tax deductible. The schedule covers both Division 40 (plant and equipment) and Division 43 (capital works) deductions for the life of the building.
Track Your WA Property Deductions Automatically
PropBoss automatically categorises your rental income, expenses, depreciation, and tax deductions for your Western Australia investment properties — no spreadsheets, no missed claims.
Related Calculators
Related State Guides
This guide is for general information only and does not constitute financial or tax advice. Tax laws change frequently — thresholds and rates shown are for the 2025-26 financial year. Always consult a qualified tax professional or registered tax agent for advice specific to your situation. Last reviewed 2026.