If you own a rental property, you can claim the following:
- 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 the following:
- 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.
