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%.

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