When talking about the tax aspects of your investment property, more often than not there is a negative connotation that comes along with it. This idea stems from cases in which the rental income of the property is lower than the operating costs. Then again, whether your property is gaining a positive income stream or not, there are a few very important tax deductions that you need to know about.


When the word “depreciation” comes up, what usually come to mind are business assets and other expensive assets like cars. However, what most people do not realise is that each year their investment property (building) depreciates along with the inclusions and this depreciation can be claimed over time.

So what are examples of these inclusions? Appliances, window coverings, air-conditioning systems, solar PV and other building technology, floor coverings and video security systems.

Landlord Insurance

We highly encourage our clients to get landlord insurance and this is based on our years of experience being in the property management industry.

Damages caused by accidents and natural disasters are unavoidable so your best option is to have an insurance that will cover these untoward incidents. This also means that you will have backup in the event that there are issues with arrears with your tenants due to justifiable circumstances such as prolonged illness, job loss or emotional breakdown.

Marketing Costs

Just like in any other business, you need effective marketing strategies if you want to reach your target market. The ultimate goal here is to attract the best quality tenants who are willing to pay optimum rent, and in order for you to achieve this is by ensuring that your property is marketed in its best possible light.

Typically, landlords have a specific amount set aside for marketing the property. Likewise, a lot of property management agencies offer standard packages depending on what suits your property and its needs.

Nevertheless, whatever amount you end up spending for the marketing of your property can be claimed as a deduction against your income.

Cost of Power and Water During Vacancy Periods

Landlords nowadays tend to leave utilities on in between tenancies. They do so in order to monitor and keep track of things that are in need of repair and maintenance. This also proves to make a big difference when showing the property to prospective tenants in that it makes the house more attractive.

These charges incurred during the vacancy period can be deducted from your income.

Property Manager Fees

The benefits of enlisting the services of a good property manager doesn’t just stop at helping you achieve the optimum results for your investment property. Did you know that property management fees are tax deductible?

Not only that, this also applies to other professional service providers such as accountants, depreciation experts and valuers.

Loan Interests

The good thing about owning an investment property is that the Australian Taxation Office will allow you to deduct the interest cost of purchasing, borrowing, refurbishing or refinancing your property as opposed to when you have mortgage for your own home. This makes a sizeable tax benefit depending on the size of your loan and its interest.

Cost of Maintenance and Repairs

All the maintenance work done on your investment property is considered business expense. Hiring tradesmen like pest controllers, electricians, plumbers, window cleaners, air-conditioning technicians and the likes – the fees you pay for these services are tax deductible.

For more advice on how to maximise the tax benefits from your investment property, we suggest you consult with your an accountant who specialises in matters regarding investment property.