Tax time tips for property investors
19/06/2025
Make the most of your deductions and stay on the right side of the ATO
As the end of the financial year approaches, property investors across Australia have an opportunity to get their finances in order and ensure they’re claiming everything they’re entitled to. But with ever-evolving rules and increased Australian Taxation Office (ATO) scrutiny, it’s more important than ever to understand what you can – and can’t – claim when it comes to your investment property.
Here are some essential tax time tips to help Australian property investors prepare effectively and maximise their deductions.
1. Know what you can claim
The ATO allows a wide range of tax deductions for investment properties. Common deductible expenses include:
Quick tip: Ensure all expenses are directly related to earning rental income – personal expenses are not deductible.
2. Separate repairs from improvements
It’s crucial to distinguish between repairs and maintenance (deductible immediately) and capital improvements (depreciated over time). For example:
3. Use a quantity surveyor for a depreciation Schedule
You can’t claim depreciation without a proper Tax Depreciation Schedule. A qualified quantity surveyor can assess your property and prepare this report, helping you maximise your deductions over the life of your investment.
Even older properties often qualify for depreciation on renovations and fixtures – so it’s worth investigating even if your property isn’t brand new.
4. Keep meticulous records
The ATO requires investors to keep records for at least five years. Make sure you have:
5. Consider prepaying interest or expenses
If you have surplus cash before 30 June, consider prepaying up to 12 months of interest or other deductible expenses to bring forward your tax deductions. This is a common strategy to reduce taxable income in the current financial year – especially if you’re in a higher tax bracket.
6. Declare all rental income
The ATO is cracking down on unreported income. Make sure to declare all rental income, including:
Avoid errors by working with a qualified tax agent familiar with real estate investments.
7. Understand negative gearing
If your property costs more to hold than it earns in rental income, you may be eligible for negative gearing – a strategy where the loss is used to offset other taxable income. While this is legal and widely used, make sure the long-term investment strategy justifies the short-term losses.
8. Seek advice from a property-savvy tax professional
The laws around property tax are complex and frequently updated. A good accountant who understands property investment will help you:
9. New superannuation tax could affect SMSF property investment strategies
From 1 July, earnings on superannuation balances above $3 million will be taxed at 30%, up from the current 15%. This includes both realised and unrealised gains – a controversial feature of the reform that could affect property investors, especially those using Self-Managed Super Funds (SMSFs).
This means that SMSF investors with growing property portfolios could cross the threshold unintentionally, given that that they may hold appreciating residential or commercial properties for long-term capital gains.
The key issue is that unrealised gains – paper profits not yet converted to cash – will be taxed. Investors may face tax bills without selling any property or generating actual income.
Final word
Tax time doesn’t need to be stressful – with the right planning, it can be a powerful opportunity to increase your return on investment. Stay organised, know your entitlements, and work with professionals who understand the ins and outs of Australian property tax law.
Need help preparing for tax time or looking to finance your next investment?
The Loan Company can connect you with trusted property-savvy professionals to help you make smarter financial decisions.
The above is provided for informational purposes only and is not intended as financial or legal advice.
