A Complete Guide for Australian Landlords Owning a rental property in Australia can come with significant tax benefits – if you know what you can claim.

Rental property tax deductions paperwork with house model, keys, and calculator – Australian landlord tax guide 2025

Many Aussie landlords miss out on legitimate deductions or get caught by the ATO for incorrectly claimed expenses. This guide breaks down what you can legally claim, common mistakes to avoid, and tips to stay ATO-compliant.

Rental Property Tax Deductions You Can Claim

As a property owner in Australia, you can claim a wide range of expenses that directly relate to earning rental income. Here’s the most important list to remember:

1. Loan Interest

You can claim the interest charged on your mortgage for your rental property.
Tip: Only the interest portion is deductible – not the principal loan repayments.

2. Repairs and Maintenance

You can claim deductions for repairs that restore the property to its original condition.
Example: Fixing a leaking roof
Example: Plumbing repairs
Important: Upgrades or improvements (like adding a new bathroom) must be depreciated over time, not claimed immediately.

3. Property Management Fees

Fees you pay to a real estate agent to manage your rental property are fully deductible.

  • Advertising fees
  • Rent collection fees
  • Maintenance coordination fees

4. Council Rates and Strata Fees

Ongoing expenses like council rates, water charges, and strata levies can be claimed.

5. Depreciation

You can claim depreciation on the building (if eligible) and depreciating assets like carpets, appliances, and air-conditioners. A depreciation schedule from a qualified quantity surveyor is recommended.

Common Rental Tax Mistakes to Avoid

  • Claiming personal use expenses for rental property periods.
  • Trying to deduct capital improvements as repairs.
  • Forgetting to adjust expenses for part-year rental or shared personal use.
  • Not declaring all rental income (including Airbnb)

 Quick Tips to Avoid an ATO Audit

  • Keep detailed records and receipts for all expenses.
  • Only claim genuine rental expenses.
  • Understand the difference between repairs and improvements.
  • Use a qualified tax agent like Tax NextGen to lodge correctly.
  • Declare all rental income, even short-term holiday rentals.

Why Australian Landlords Should Get Expert Help

ATO audits on rental properties are on the rise. Tax NextGen helps Aussie landlords:

  • Maximise their legitimate deductions
  • Avoid common rental claim mistakes
  • Lodge on time and stay fully ATO-compliant

Need Rental Property Tax Help?