Expenses you can deduct in the income year incurred
Generally you can claim an immediate deduction for expenses related to the management and maintenance of the property, including interest on loans. You can claim a deduction for these expenses only if you actually incur them and they are not paid by the tenant.
If your property is negatively geared - that is, you borrowed money to buy the property and your net rental income after other expenses is less than the interest on the loan - you may be able to claim the full amount of rental expenses against your other income, such as salary and wages.
To claim deductions for expenses, your property must include a dwelling that is rented or available for rent - for example, advertised for rent. If you are building a rental dwelling, you can claim deductions for the land while you are building.
Expenses for which you may be entitled to an immediate deduction in the income year you incur the expense include:
- advertising for tenants
- body corporate fees and charges
- council rates
- gardening and lawn mowing
- insurance (building, contents, public liability)
- interest expenses
- land tax
- pest control
- property agent's fees and commission
- repairs and maintenance
- travel undertaken to inspect the property or to collect the rent
- water charges.
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