Rental Expenses. What you can and cannot claim.

Rental Expenses you can claim now

Claimable expenses may include but are not limited to:

  • advertising for tenants
  • bank charges
  • body corporate fees
  • cleaning
  • council rates
  • electricity and gas
  • gardening and lawn mowing
  • in-house audio/video service charges
  • insurance – building, contents, public liability, landlord insurance
  • interest on loans
  • land tax
  • legal expenses
  • lease costs – preparation, registration, stamp duty
  • pest control
  • property agent’s fees and commission
  • quantity surveyor’s fees (claimed at Item D10)
  • repairs and maintenance**
  • secretarial and bookkeeping fees
  • security monitoring fees
  • servicing costs (e.g. servicing a water heater)
  • stationery and postage
  • telephone calls
  • travel and car expenses – from 1 July 2017, not allowable for residential properties unless the taxpayer is an excluded entity
  • water charges

A deduction can only be claimed for these expenses if the expense was actually incurred and your property was rented or was genuinely available for rent in the year you wish to make the claim.***

If you use your property for both private and income-producing purposes, you can only claim a deduction for the portion of any expenses that relate to the income-producing use.

** see Repairs and maintenance or New Asset Improvement

***see initial repair rule


Rental Expenses you can claim over several years

There are some expenses that may be claimed over a number of income years:

  • borrowing expenses such as Lenders Mortgage Insurance which is claimed over 5 years.
  • decline in value of depreciating assets (number of years vary – Div 40**)
  • capital works deductions (claimed over 40 years – Div 43**)

** See  information – Div 43 vs Div 40


Rental Expenses you cannot claim

  • Travel to your property to carry out repairs, inspect, collect rent, prepare property for new tenant etc is non deductible.
  • Some borrowing expenses – see ATO info here
  • Decline in value for assets in an existing residential rental property if you entered into a contract to purchase that property on or after 7.30pm (AEST) on 9 May 2017

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