Rental property deductible expenses

What you can claim?

You can claim expenses relating to your rental property but only for the period your property was rented or available for rent – for example, advertised for rent.

Expenses could include:

• advertising for tenants

• bank charges

• body corporate fees

• borrowing expenses

• capital works

• council rates

• decline in value of depreciating assets

• gardening and lawn mowing

• insurance

• interest expenses

• land tax

• legal expenses

• pest control

• phone

• property agent fees or commissions

• repairs and maintenance

• stationery

• travel undertaken to inspect the property or to collect the rent

• water charges.

If part of your property is used to earn rent, you can claim expenses relating to only that part of the property. You will need to work out a reasonable basis to apportion the claim.

Example

Timmy’s private residence includes a second storey which he rented out. The second storey represents 35% of the total floor area of the house. Timmy also shared the laundry with his tenant. The laundry takes up 5% of the total floor area of the house. If half is a reasonable figure for use of the laundry by the tenant, Timmy can claim 37.5% of the expenses for the property – that is:

35% + (1/2 x 5%) = 37.5%.

Need help with your investment property expenses? Contact us today.

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