Top deductions for investment properties in Australia part 3

Utility fees (where it’s not paid by the tenant)


You are able to claim the basic costs for any electricity, gas, or water supply fees that you pay during tenancies.

Usually, this is all paid by the tenant, but this is helpful in the case where there is a gap between tenancies - in this case, supply charges and any usage charges incurred between tenants can be legitimately deducted from any income.

Pest control

Professional pest control costs are tax-deductible and you or your tenant can claim this expense depending on who paid for it.

Repairs and maintenance

Repairs and maintenance can be claimed as a tax deduction in the same income year if the repairs are a result of wear and tear, like fixing a broken appliance or repairing storm or flood damage.

However, the difference between repairs and improvements can be confusing for property investors.

If you improve the property this is not the sort of expense you can write off immediately.

A repair replaces a part of something or corrects something that’s already there and has become worn out or dilapidated.

On the other hand, an improvement makes something better than it was originally.

Generally, an improvement makes something function more efficiently than it used to and will increase a property’s market value or extend its income-producing potential.

Some legal costs and lease document preparation expenses

If you have to hire legal professionals for something related to the tenant, such as eviction or an unpaid lease, you can claim this as a tax deduction.

However, you can’t claim the legal fees for initially buying the property – these are called capital costs.

Capital gains discount

If you make a capital gain on the sale of your investment property, you need to pay tax on this profit - called Capital Gains Tax (CGT).

If you bought and sold your property within 12 months, your net capital gain is simply added to your taxable income, which, in turn, increases the amount of income tax you pay.

However, if you held onto the property for more than a year before selling it, you’re eligible for a capital gains discount of 50%, which means you only need to incorporate half of the capital gain into your personal tax return.

RealRenta has all the tools that a property manager has but for less than ¼ the cost of a property manager.

Join now and the cost is less than a cup of coffee a week to manage your rental property

RealRenta also has a free vision, so why not check it out

Jason Gwerder
Monday, 27 June 2022

Join our mailing list Receive Free Property Tips and news

Now Partnered With


Contact Us

1300 11 RENT (7368)