The 2025 Landlord’s Tax Checklist: 15 Deductions to Maximise Your Refund
With interest rates squeezing rental yields, many Australian landlords are feeling the pressure.
But are you claiming every deduction you’re legally entitled to in your 2024–25 tax return?
Most landlords claim the basics (like loan interest). The money is often in the “forgotten” items:
apportionment rules, borrowing costs, and the big two depreciation categories.
Before you use any checklist: 3 ATO rules that trip landlords up
- Travel is generally not deductible for residential rental properties (with limited exceptions).
- Repairs vs improvements: repairs may be immediate; improvements are usually capital (claimed over time).
- Depreciation limits: for many established residential properties, you generally can’t claim depreciation on “second-hand” plant and equipment.
ATO references: rental expenses rules, travel restrictions, and second-hand asset rules are set out in ATO guidance.
15 Rental Property Deductions (ATO-aligned)
These apply when the property is rented or genuinely available for rent, and you paid the expense and were not reimbursed.
| Expense item | What you can claim | Trap / note |
|---|---|---|
| 1) Loan interest + borrowing costs | Interest on the loan used to buy the rental. Some loan costs may be deductible. | Principal is not deductible. Mixed-purpose loans need apportionment. Borrowing expenses are often claimed over up to 5 years or loan term. |
| 2) Council rates | Rates for periods rented/available for rent. | Apportion if private use/blocked periods. |
| 3) Water charges | Fixed charges; usage if you pay and aren’t reimbursed. | Check what the tenant reimbursed. |
| 4) Land tax | Land tax assessed on the investment property (where applicable). | Not for your PPOR. |
| 5) Strata / body corporate fees | Regular admin and sinking fund fees. | Special levies for improvements may be capital. |
| 6) Building insurance | Cover for damage (fire, flood etc.). | Keep policy + invoice. |
| 7) Landlord insurance | Tenant default / malicious damage cover. | Claim only what you paid. |
| 8) Agent fees | Management fees, letting fees, statement fees. | Use the agent annual summary. |
| 9) Repairs & maintenance | Repairs that restore the property to its previous condition. | Improvements/upgrades are usually capital (claimed over time). “Initial repairs” can be capital too. |
| 10) Gardening | Lawn/garden maintenance you pay for. | Landscaping improvements may be capital. |
| 11) Pest control | Professional pest control services. | Keep invoice + dates. |
| 12) Cleaning | Cleaning between tenancies. | Apportion if private use. |
| 13) Capital works (Division 43) | Construction/structural costs claimed over time (where eligible). | Can reduce cost base (CGT impact). Eligibility and start dates matter. |
| 14) Plant & equipment (Division 40) | Decline in value of eligible assets (appliances, carpets, blinds etc.). | Rules restrict claims on second-hand assets in many established residential properties. |
| 15) Quantity surveyor (depreciation schedule) | Cost of the schedule is generally deductible. | Get it early enough to use it properly and keep supporting documents. |
What landlords commonly get wrong
- Claiming travel: generally not deductible for residential rentals.
- Calling upgrades “repairs”: improvements are usually capital.
- Forgetting apportionment: private use or non-available periods can reduce claims.
- Missing borrowing cost rules: some loan costs are spread over up to 5 years or the loan term.
Want your rental schedule reviewed?
If you’re unsure about repairs vs improvements, apportionment, or depreciation eligibility, we can review your portfolio to help you claim everything you’re entitled to — safely.
FAQ
Can I claim travel to inspect my rental property?
For most residential rental properties, travel deductions are not available (with limited exceptions).
What’s the difference between a repair and an improvement?
Repairs restore something to its previous condition; improvements upgrade it and are usually claimed over time as capital.
Can I depreciate assets in an established property?
Rules restrict depreciation claims for second-hand plant and equipment in many established residential properties.
NEED HELP? This article provides general information and should not be considered legal or tax advice. For personalised guidance, please contact The Quinn Group.
