ATO FOCUS:

RENTAL INCOME AND EXPENSES

Rental Expenses

Rental expenses fall into two main categories:

1. Immediate deductions and

2. Deductions claimed over several years

1. Immediate Deductions

These can be claimed in the year they are incurred and include:

• Interest on loans

• Property rates

• Insurance

• Advertising costs

• Property agent's fees

• Land tax

• Lease document expenses (preparation, registration, stamp duty)

• Building repairs and maintenance

Please Note:

These expenses are only deductible if you have incurred them, not if they are paid by the tenant.

For a complete list of rental expenses you can claim now, visit this link at the ATO website.

Property Improvements - Structural - Granny Flat with Pool - Capital Works - Rental Expenses

2. Deductions Claimed Over Several Years

These deductions account for the decline in value of depreciating property and are divided into two subcategories:

1. Capital Works

• Covers buildings, extensions, and structural improvements

• Examples: Additional rooms, granny flats, garages, pergolas, internal wall modifications,

  kitchen and bathroom renovations, sealed driveways, retaining walls, and fences

• Depreciated over a 40 year period

2. Plant and Articles

• Includes window coverings, flooring, and appliances

• Depreciated over shorter periods as per ATO guidelines

• Allows for accelerated depreciation in earlier years of property ownership

The amount of depreciation can vary significantly between properties due to factors such as age and the specific plant and articles present.

For personalised advice on maximising your property depreciation, please contact us using the Contact form or call our office during business hours, Monday to Friday, 9 am to 5 pm (AEST).

Alternatively, visit this link at the ATO website for information on rental expenses you can claim over several years.