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What Tax Deductions Can You Claim as a Landlord?

Becoming a landlord can help you earn income to repay your investment home loan, however many new landlords miss out on the tax deductions they can claim.

Working as a landlord is an attractive proposition. You take out a home loan for an investment property, then you use the rental income to repay the home loan. You can then use whatever’s left for further investments.

But did you know there are many tax benefits attached to being a landlord? Many investors miss out on some crucial deductions because they complete their tax returns themselves and they don’t stop to ask, “What tax deductions can I claim?” An accountant can help to answer this for you – but it’s also a good idea to research these deductions for yourself. Doing so ensures you can provide your accountant with all of the information they need to minimise your tax bill.

What can I claim on tax?

You can claim for two types of deductions:

  • Immediate deductions for expenses incurred during the course of the financial year; and
  • Deductions for expenses that you claim over the course of several years.

The Australian Taxation Office (ATO) provides a full list of the expenses that landlords can claim for on their tax returns. But here is our handy “What Can You Claim On Tax checklist”::

  • Any expenses related to borrowing;
  • Corporate charges and fees related to your property;
  • Land tax;
  • Lawn mowing and gardening bills;
  • Council rates;
  • Cleaning bills;
  • Legal expenses related to your property;
  • Building insurance;
  • Public liability insurance;
  • Contents insurance;
  • The depreciation of your assets;
  • Any marketing efforts used to attract new tenants;
  • The costs of maintenance and repairs;
  • Pest control;
  • Water bills;
  • The commissions and fees you pay to any real estate agents during your ownership of the property;
  • Travel expenses related to maintenance or rent collection.

You must keep hold of any receipts related to these expenses. Though you don’t always need them, you won’t be able to claim an expense if you can’t produce the related receipt when asked.

What Can’t I Claim For?

It’s important that you know what you can’t claim for, especially if you complete your own tax returns. This ensures you won’t make any unwarranted claims that could cause issues with the ATO.

You can’t claim for:

  • Disposal and acquisition costs related to the property. These include the stamp duty you pay when you buy or sell the property and any legal costs you incurred during the transaction. You also can’t claim for any travel expenses, marketing, or agent commissions incurred as a result of buying or selling the property;
  • Any bills that the tenant pays. For example, you cannot claim on the gas bill if the tenant pays it;
  • Any expenses that are not related to the management of the property.

What to Do Next

With the help of a tax professional, you can claim all of the deductions you’re entitled to as a landlord. We also recommend you:

  • Read about negative gearing and how it might benefit you;
  • Find out how much stamp duty you’ll have to pay when you buy your property;
  • Live chat with one of our experienced home loan brokers.

This information is general in nature and you should always seek professional advice when making financial decisions.

This information in this article is general only and does not take into account your individual circumstances. It should not be relied upon to make any financial decisions. uno can’t make a recommendation until we complete an assessment of your requirements and objectives and your financial position. Interest rates, and other product information included in this article, are subject to change at any time at the complete discretion of each lender.

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Alexi Neocleous

With over 20 years experience, Alexi has written extensively a wide cross section of financial topics. These topics range from financial planning, mortgages, property commentary and all points in between.

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