Rental Property Tax Returns
Tax returns for property investors: we claim every deduction you are entitled to, set up depreciation properly and plan for capital gains tax when you sell. In our Sydney offices or online.
Maximise your property deductions
Owning an investment property comes with a long list of deductions — and it is easy to miss some. Our experts make certain you claim everything you are entitled to, so you keep more of your rental income.
What we look after for property investors
- Rental income and expenses: rent, bond kept for damage or unpaid rent, insurance payouts, and every deductible expense.
- Immediate deductions vs capital costs: repairs and maintenance are generally deductible straight away; improvements and initial repairs are claimed over time.
- Depreciation: capital works deductions for the building and decline in value of eligible fixtures, using a quantity surveyor schedule where it helps (see below).
- Negative gearing: a rental loss can generally reduce your other income, such as your salary. From 1 July 2027 this is limited for established property bought after 12 May 2026 (see below).
- Co-owned property: income and expenses split by your legal ownership share, whoever pays the bills (see below).
- Short-term rentals: Airbnb and holiday-let income, and apportioning expenses for private use.
- Selling: working out capital gains tax, the 50% discount and any main residence exemption before you sign.
Negative gearing for property bought after 12 May 2026
If you bought an established home or unit after 7:30pm (AEST) on 12 May 2026, then from the 2027–28 income year a rental loss on it can no longer reduce tax on your wages or business income. What counts is the date you signed the contract, not settlement. The loss isn't lost. It's quarantined:
- it first reduces any net rental profit from your properties that aren't affected,
- then any capital gains you make that year on residential property,
- and anything left carries forward to the next year.
Properties bought before the cut-off, new builds, commercial property and shares keep negative gearing. Transferring a property to a family member or a trust can make it a new purchase after the cut-off, so talk to us first. If you have a PAYG withholding variation based on rental losses, it will need to be reviewed for any affected property. From 1 July 2027, the CGT discount is also replaced with indexation for growth after that date. See our guide to the negative gearing and CGT changes from 2027.
Depreciation schedules
A quantity surveyor's depreciation schedule sets out two kinds of deductions:
- capital works on the building and structural improvements, generally 2.5% a year for 40 years for construction after 15 September 1987, and
- decline in value of fixtures such as hot water systems, carpets and air conditioners.
If you bought a second-hand residential property after 7:30pm on 9 May 2017, you generally can't claim decline in value on the fixtures that were already there, only on new assets you buy. Capital works deductions still apply. Capital works deductions you claim reduce the property's cost base for CGT when you sell, so we keep track of them. If you've never claimed depreciation, we can check whether recent returns can be amended (generally within 2 years for individuals). See investment property depreciation schedules.
Co-owned property
If you own a rental with someone else and you're not running a rental business, the income and expenses are split by your legal interest on the title: equally for joint tenants, or by your share for tenants in common. A private agreement to split the loss differently, or one owner paying most of the bills, doesn't change this. The exception is interest on a loan you took out to buy your own share, which you can generally claim in full. We prepare each owner's rental schedule so the figures match.
How it works
Two things we often find missed or misclaimed: borrowing costs (loan establishment fees, mortgage registration and lender's mortgage insurance) totalling more than $100 must be spread over 5 years or the loan term if shorter, and travel to inspect or maintain a residential rental property hasn't been deductible since 1 July 2017.
- 01
Send us your records
Send us your agent's annual statement, loan interest statements and receipts, or bring them in.
- 02
We prepare your schedule
We prepare the rental property schedule in your tax return, and check what can be claimed now and what must be claimed over time.
- 03
We lodge it for you
We lodge your tax return, with the rental property schedule, for you.
Fees
We agree a fixed fee with you before we start, so there are no surprises. The fee for managing your tax affairs is generally tax-deductible in the year you pay it. See us at our Chippendale office, or work with us by phone, video and email from anywhere in Australia.
Deductions we'll make certain you claim
Common deductions available to property investors:
Renovations & Repairs
Repairs and maintenance now. Improvements and initial repairs over time.
Advertising Fees
Costs to advertise for and secure tenants.
Depreciation
Decline in value of the building and its fittings.
Council Rates
Council and water rates for the rental period.
Operating Costs
Property management, insurance and ongoing running costs.
Legal Fees
Eligible legal expenses relating to the property.
Interest
Interest on the loan, or the part of it, used for the rental.
What to bring
Have these ready and we can lodge your rental property return quickly and accurately.
- Annual rental income statement from your agent
- Loan interest statements
- Council and water rates notices
- Property insurance statements
- Repairs, maintenance and improvement receipts
- Depreciation schedule (if you have one)
- Purchase contract and settlement statement (first year, or if you bought this year)
- Loan documents showing establishment fees, mortgage registration and lender's mortgage insurance
- Strata levies and land tax notices
- Dates the property was rented or available for rent, and any days you or family used it
- Short-term rental platform payout statements (Airbnb, Stayz)
- Sale contract and settlement statement, if you sold
- The contract date and time for any property bought around 12 May 2026
Our tax and accounting services
A full range of services for individuals and small businesses — helping you handle every tax and accounting need and reach your financial goals. Explore our services.
Free guides
Related guides
Plain-English answers from our registered tax agents. Free to read, no sign-up.
Rental Property & Investment
Rental property tax deductions
Claim rates, insurance, agent fees, interest and repairs in the year you pay, capital works at 2.5% a year. With a deductions table and holiday rental rules.
Read guide
Rental Property & Investment
Is rental income taxable in Australia?
Yes. Rent is taxed at your marginal rate. What counts as rental income, what you can claim, how to report it at item 21, and the new rules from July 2027.
Read guide
Rental Property & Investment
Investment property tax deductions
Claim loan interest, rates, insurance and repairs in the year you pay, borrowing costs over five years, plus depreciation. Worked examples and ATO red flags.
Read guide
Ready to lodge your rental property return?
Our registered tax agents make it quick and painless — book an appointment or grab a quick quote today.
Frequently asked questions
Yes — deductions are generally apportioned for the period the property was genuinely available for rent. We work out the correct split for you.
It's usually worthwhile for newer properties, or ones with recent renovations. A quantity surveyor's schedule works out capital works deductions on the building and decline in value on fixtures, which you can't claim reliably without one. For second-hand properties bought after 9 May 2017, deductions for existing fixtures are generally not available, so the schedule mainly covers capital works. We'll tell you whether it's worth getting one.
Income and deductions are split according to your legal ownership share. We handle each owner’s return correctly.
Repairs that fix damage or wear from renting the property are generally deductible in the year you pay for them. Improvements, and repairs to defects that existed when you bought the property, are capital costs claimed over time.
Generally, yes. If your rental expenses are more than the rent, the loss can usually reduce your other taxable income. This is negative gearing. From the 2027–28 income year, losses on established residential property you bought after 7:30pm (AEST) on 12 May 2026 can't reduce your other income. They're quarantined and carried forward instead. Properties bought before then, and new builds, are not affected.
Usually, yes. The gain is the sale price less your cost base. If you've owned the property for more than 12 months, individuals can generally reduce the gain by 50%. For growth from 1 July 2027, the discount is replaced with indexation and a 30% minimum tax for resident individuals, though growth up to 30 June 2027 keeps the discount. Talk to us before you sell. See capital gains tax.
For 2026–27, yes: the limit starts from the 2027–28 income year. From then, a net loss on that property can't reduce tax on your salary. It first offsets rental profits from unaffected properties, then residential capital gains that year, and anything left carries forward. What matters is when you signed the contract. Plan your cash flow for 2027–28 now, because the loss won't produce a refund.
Generally not. Co-owners who aren't running a rental business must split income and expenses by their legal interest on the title, even if they agree otherwise or one pays more. Joint tenants split equally. Tenants in common split by their shares. If one owner borrowed separately to buy their own share, they can generally claim all of the interest on that loan.
Generally not. Since 1 July 2017, travel to inspect, maintain or collect rent for a residential rental property isn't deductible for most individual investors, and it can't be added to the property's cost base either. The exception is if you're carrying on a business of letting properties. Costs of having a property manager or tradesperson do the work are still deductible.