The more deductions that you can claim for your investment property, the bigger the cost base, which is taken into account when you sell because you will pay less Capital Gains Tax as a result.

So what can you claim?

• Repairs

The ATO defines repairs as “work to make good or remedy defects in, damage to, or deterioration of the property”.

• Costs of managing

These are Agent Fees/commissions, Body Corporate Fees, Advertising Fees, Council Rates, Water charges, land tax, travel costs to inspect the property.

• Costs of maintenance

The ATO definition: “work to prevent deterioration or fix existing deterioration”.

• Improvement costs

ATO definition: “anything that will increase the amount of rent you charge, increase the life of the property, or anything that goes beyond just fixing or repairing something.”

• Interest

ATO Definition: interest on a loan you used to purchase a rental property or loans to buy appliances- make repairs, financing renovations or land purchases.

• Legal Expenses

These include eviction costs, court costs for retrieving lost rental income, defending damages claims from third parties (who are injured on your property).

• Get a depreciation schedule

A depreciation schedule details how much you can claim on the assets in the property as they depreciate each year.

Note: The property needs to be advertised for rent or actually rented out to be able to claim these expenses.

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