The 11 Investment Property Tax Deductions You Can Claim

*Updated July 2026 

Below is a list of investment property tax deductions that property investors can claim as a deduction against rental income for this year. 

We have also included a list of investment property expenses that are not deductible and cannot be claimed, according to the Australian Taxation Office (ATO). 

Understanding the full range of deductions available to you could be the difference between an investment property that generates a profit (a positively geared property) and one that runs at a loss (a negatively geared property). 

What Immediate Rental Property Tax Deductions Can You Claim? 

1. Property Management and Maintenance Expenses 

• Advertising for tenants (whether paid directly by you or charged by the real estate agent) 

• Body corporate fees and strata title fees and charges. Note that contributions to a special levy for capital works are not immediately deductible; they are capital in nature and may be claimable over time or on sale. 

• Cleaning 

• Gardening and lawn mowing 

• Pest control 

• Security patrol fees 

2. Rates and Taxes 

• Water rates, charges and usage 

• Council rates 

• Land tax. First-time owners generally need to register with the revenue office in each state where they hold property, such as Revenue NSW. Thresholds and rules differ between states, and the Northern Territory has no land tax. 

3. Property Agent Fees 

• Fees and commissions (including GST) 

• Postage and petties 

• Statement fees 

• Bank charges and fees 

• Lease document expenses 

• Letting fees 

4. Administration Expenses 

• Stationery, phone and internet usage (where they relate to the management of your investment property) 

• Postage of documents relating to property management 

• Legal expenses relating to debt collection or tenant problems 

• Electricity and gas (where the tenant is not responsible for these expenses) 

5. Property Insurance 

• Landlord insurance 

• Building insurance 

• Contents insurance 

• Public liability insurance 

6. Repairs and Maintenance 

Provided the work done on the investment property maintains it rather than improves it, you may be able to claim the costs of repairs and maintenance such as plumbing, electrical work and handyman fees. 

The ATO is particularly vigilant about expenses described as repairs when they are in fact improvements. For example, fixing broken glass in a window is a repair, but replacing the whole window frame is an improvement. 

Repairs made or maintenance completed immediately after purchasing the property, to make it suitable for rental, are considered capital in nature. These costs form part of the acquisition cost of the property and are not immediately claimable. Keep good records, as they may reduce your capital gain when you sell. 

7. Interest on Your Investment Loan 

This is often the most significant investment property tax deduction you can claim. 

If you took out a loan to purchase your investment property, you are generally entitled to claim the interest charged on that loan as a rental property deduction. For the interest to be deductible, the loan must have been used to acquire an income producing asset such as a rental property. 

Where one loan has been used to purchase both your investment property and private assets, the interest must be apportioned based on how much of the principal was used for each purpose. This commonly arises with line of credit facilities. 

Note that interest on amounts withdrawn from a redraw facility attached to the loan is not deductible where the redraw was used for private purposes. 

8. Quantity Surveyor Fees 

The fees incurred in engaging a quantity surveyor to prepare a tax depreciation schedule are themselves deductible. 

9. Property Investment Seminars 

You can generally claim the cost of attending property investment seminars where the seminar relates to operating or maximising the return on properties you currently own. There is no deduction for seminar costs incurred before a property is acquired, and where a seminar covers both, the cost should be apportioned. 

What Can You Claim on an Investment Property Over Several Years? 

10. Borrowing Expenses 

Borrowing expenses are claimed over five years, or over the loan period where that is shorter. Where total borrowing expenses are $100 or less, they can be claimed in full in the year they are incurred. Claimable borrowing expenses include: 

• Loan application fees 

• Lender’s legal expenses 

• Title search fees 

• Lenders mortgage insurance 

• Mortgage registration fees 

11. Tax Depreciation 

General wear and tear, otherwise known as depreciation, can be claimed as a non-cash deduction against your rental income. Depreciation falls into two categories: 

• Capital works (Division 43). You can generally claim 2.5 per cent of the construction cost of your investment property each year from the time it was built, for up to 40 years, including the cost of structural improvements. 

• Plant and equipment (Division 40). Assets such as carpets, blinds and air conditioning units are claimed over their effective life. 

An important limitation applies to plant and equipment. Since 2017, investors who purchase an established residential property generally cannot claim depreciation on plant and equipment that was previously used, such as the carpets and appliances already in the property at purchase. Deductions for these assets remain available for brand new properties, for substantially renovated properties, and for new assets the investor purchases and installs. Capital works deductions are not affected by this restriction, which is one reason a professionally prepared depreciation schedule remains valuable for established properties. 

What Rental Property Expenses Are Not Tax Deductible? 

H2 for publication. The following items are either not deductible or are considered by the ATO to be capital or private in nature. 

On purchase of the investment property: 

• The purchase price, which forms part of your cost base and reduces your capital gain on sale 

• Stamp duty on the purchase 

• Legal expenses and conveyancing fees 

• Property inspection fees 

• Renovations and repairs immediately after purchase 

• Travel expenses to inspect your rental property, which were once claimable but can no longer be claimed by individual investors 

On the sale of the investment property: 

• Legal expenses and conveyancing fees 

• Advertising 

• Agent fees 

• Cost of reports 

Whilst these selling costs are not deductible against rental income, they are taken into account when calculating your capital gain or loss on sale, so keep the records. 

Where the property is not genuinely available for rent: 

Deductions are only available for periods when the property is rented or genuinely available for rent, with active and realistic efforts to find a tenant. Where a property is used privately, reserved for your own use, or advertised in a way that makes tenancy unlikely, expenses must be apportioned and may not be deductible for those periods. 

A Note on the 2026 Federal Budget 

The May 2026 Federal Budget proposes changes to how rental losses can be offset against other income for certain properties from 1 July 2027. The deductions described on this page are not themselves affected, but the way losses are applied may change for some investors depending on when and what they purchased. These measures remain subject to the passage of legislation. Our summary of the proposed negative gearing changes explains who is affected and who is not. 

You Need Documentation to Claim an Investment Property Tax Deduction 

None of the expenses listed can be claimed without proof. Keep receipts, invoices and any other documents relating to your rental property’s expenditure so that every claim can be supported. Electronic copies of receipts and invoices are acceptable evidence, so capturing and storing records digitally is a simple way to stay organised. 

Key Takeaways 

Claiming everything you are entitled to, and nothing you are not, comes down to good records and an accurate understanding of the rules. The rules change, as the depreciation restrictions and the proposed Budget measures show, and advice that reflects your circumstances matters more than any checklist. 

At Property Tax Specialists, property tax is our primary focus and expertise. Get in touch if you would like to review and discuss: 

• Your current investment property tax position 

• The disposal of an investment property 

• Your asset protection strategies 

• Capital gains tax and the main residence exemption 

• Purchasing an investment property through your SMSF 

Call us on 1800 800 829 or book a consultation to get started.