If you could get your money back on something you had spent a great deal of your income on, you would leap at the chance – wouldn’t you?

Despite this, there are a myriad of claims that property investors like yourself may be missing out on, especially if you do your own tax return. You could be entitled to a tax return worth hundreds or even thousands of dollars without realising! Arm yourself with the knowledge you need to claim back expenses on your investment property.

If an accountant/tax agent is responsible for lodging your tax return, make sure they are fully aware of everything you have spent on your investment property so they can make appropriate claims on your behalf. 

What might I be able to claim?
Claims fall under two categories – expenses that entitle investors to an immediate deduction in the year in which they incur the expense, or expenses that can be claimed over a number of years. 

According to the Australian Taxation Office website, landlords can claim back a variety of expenses, including:

  • Body corporate fees and charges
  • Borrowing expenses
  • Cleaning, gardening and lawn mowing bills
  • Council rates and land tax
  • Decline in value of depreciating assets
  • Advertising for tenants
  • Legal and interest expenses
  • Insurance (building, contents, public liability)
  • Pest control
  • Repairs and maintenance, including servicing costs
  • Property agent fees and commissions
  • Water charges
  • Travel expenses of any trip taken to inspect or maintain the property, or collect the rent 

It is important to note that these expenses can only be deducted if they are paid for by the landlord, rather than the tenant. 

Also make sure you keep your receipts and other forms of proof of purchase associated with these costs – in some cases they aren’t required, however it’s better to have them just in case!

What can’t be claimed?
While there are a lot of things that can be claimed regarding a rental property, limitations do apply. Here are some guidelines as to what cannot be claimed as a tax deduction: 

  • Acquisition and disposal costs of the property, such as conveyance costs, advertising, agent commission, legal fees and stamp duty on the purchase and sale, and travel expenses.
  • Expenses not incurred by the owner - for example, water and electricity used and paid for by the tenant.
  • And of course, expenses that are not related to the rental of that property cannot be claimed – this may seem obvious, but sometimes the lines between what is a related expense and what isn’t is blurred. 

If unsure about what you can claim, ask your tax agent/accountant or check the ATO’s website – www.ato.gov.au. You can also use Yourmortgage's income tax calculator to find out how much income tax return you can get.