What expenses can I claim for rental property?

You can claim followings:

  • Legal fees up to $10,000
  • Rates and Insurance
  • Interest paid on funds borrowed to purchase your property
  • Property Management fees & commission
  • Repairs and maintenance (unless they improve property)
  • Motor vehicle and / or travel expenses to inspect the property
  • Mortgage repayment insurance
  • Accounting fees
  • Depreciation

You cannot claim followings:

  • Capital or private expenses cannot be deducted from your rental income. Capital expenses are costs you incur to buy or increase the value of a capital asset.
  • Private expenses are incurred for your own benefit and are not connected with producing taxable income.
  • The purchase price of a rental property.
  • The capital part of any mortgage repayment.
  • Interest on money which you borrow for some other purpose other than financing the rental property, even if you use the rental property to secure such a loan.
  • Any repairs and maintenance that go beyond replacement and are in fact improvements to the property.
  • Real estate agent’s fees incurred as part of buying or selling the property.
  • The cost of making any additions or improvements to the property.
  • Depreciation on the building from the 2011/2012 income year.
  • For the 2009/2010 income year and beyond, a deduction is available for legal expenses incurred in acquiring a capital asset that is used to derive taxable income. This is provided your total legal expenses for an income year are equal to or less than $10,000.