How to Save Tax on Your Investment Property

  • Posted 24 Aug

How to Save Tax on Your Investment Property

Savvy property investors can benefit from tax breaks related to their income-generating properties by understanding tax laws and regulations. You may be able to save hundreds or thousands of dollars this year by taking advantage of the deductions you are entitled to claim.

You may even by able to supplement your regular income by having the savings distributed throughout the year instead of claiming a lump sum payment at the end of the fiscal year. The Australian Tax Office (ATO) offers a PAYG withholding variation option that lets you estimate the deductions you intend to claim.

So what are some of your options for saving big on your next tax bill? Depreciation is the main one, but you may also be eligible for other landlord savings.

Here are some of the tax breaks property investors need to be on the lookout for:


Property investors have two options for claiming depreciation. One allowance is for plan and equipment. This includes interior items that stay with the property including appliances, carpeting, and blinds. The other type of depreciation is a building allowance. Properties built or renovated after 15 September 1987 are eligible for this depreciation based on construction costs.

To take advantage of property depreciation, you’ll need a depreciation schedule created by a licensed quantity surveyor. A depreciation schedule covers 40 years of claims, with higher depreciation rates available for newer properties. As an example, you may be able to deduct $10,000 or more in your first year.

The cost for a depreciation schedule is based on the size and location of the property. But expect to spend around $600-$700 for a two-bedroom apartment in a major city. The good news is that this fee is also tax deducible.


Certain types of expenses that you incur as a landlord can also be tax deducible. These include the advertising fees you pay for finding tenants, bank fees paid on the account you use to collect rent, corporate management fees, and council rates.

You can also claim basic maintenance costs such as cleaning and gardening fees, pool maintenance, and pest control. You can deduct repair costs too, though if you are renovating a property rather than making repairs this would fall under the deprecation rules above.

Any travel expenses incurred to maintain the property are claimable, as are any legal expenses needed to manage the property. You can even claim the insurance you pay on the property and the mortgage interest you pay on any home loans.

Professional advice

Tax laws are complex and you should always work with an accountant you trust. Provide the depreciation schedule and receipts for all expenses to your accountant. They can help determine which expenses are eligible and help you make the most of the deductions you are eligible for. Keep all records for five years after the current tax year in case of an audit.


Interested in property investing or acquiring a mortgage for your own family home? Contact us today and let Australian Credit and Finance work to provide you with a high quality mortgage at the best possible rate.

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