Rental Property Deductions 2026: What Can You Claim?

Rental property owners may be able to claim expenses that relate to earning rental income.

Common rental property deductions can include loan interest, council rates, water rates, landlord insurance, property management fees, repairs, maintenance, body corporate fees and certain borrowing or depreciation costs.

But there are rules.

You generally need to make sure:

• the property was rented out or genuinely available for rent

• the expense relates to the rental property

• private use has been excluded

• capital costs are treated correctly

• records are kept

• expenses are not double claimed

That is the neat version.

The real version usually includes an agent statement, three invoices called “maintenance”, a loan summary, a Bunnings receipt with no explanation, and someone saying, “Surely that’s deductible?”

Possibly.

Let’s not use “surely” as a tax position.

GoTax helps Australians complete rental property tax returns online, with returns checked by registered tax agents before lodgement.

Start your rental property tax return online with GoTax

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The basic rental deduction rule

The basic rule is simple:

You can generally claim expenses connected to earning rental income.

You generally cannot claim:

• private expenses

• expenses for periods of private use

• expenses for a property not genuinely available for rent

• capital costs as immediate deductions

• travel to inspect residential rental properties, unless an exception applies

• costs already claimed somewhere else

• costs you cannot support with records

Rental deductions are not based on whether the property cost you money.

They are based on whether the expense is deductible under the rules.

A property can be expensive and still not make every cost claimable.

Very inconsiderate.

Very tax.

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Common rental property deductions

Common rental property deductions may include:

Expense	Common treatment
Property management fees	Often deductible
Advertising for tenants	Often deductible
Council rates	Often deductible for rental periods
Water rates	Often deductible for rental periods
Landlord insurance	Often deductible
Building insurance	Often deductible
Body corporate fees	Often deductible, but special levies need checking
Loan interest	Often deductible if the loan relates to the rental property
Repairs	May be deductible if genuinely repairs
Maintenance	May be deductible if connected to rental use
Pest control	Often deductible
Cleaning	Often deductible where rental-related
Gardening	Often deductible where rental-related
Bank fees	May be deductible if rental-loan related
Tax agent fees	May be deductible
Depreciation	May apply depending on the asset and rules
Capital works	May be claimed over time where eligible
Borrowing expenses	May be deductible over time

That list is useful.

It is not a blank cheque.

Each item still needs to be checked against the facts.

Tax law enjoys ruining good lists.

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Property management fees

Property management fees are usually one of the easiest deductions to identify.

They may include:

• management commission

• letting fees

• statement fees

• inspection fees charged by the agent

• administration fees

• advertising charged through the agent

• lease renewal fees

These are often shown on the annual property manager statement.

But check the statement carefully.

Some statements show expenses already deducted from rent.

Others show owner payments.

Some show vague categories that need more detail.

If the agent statement says “repairs — $2,800”, you may still need the invoice.

The tax return needs to know what was repaired.

“Stuff” is not a category.

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Council rates and water rates

Council rates and water rates may be deductible where they relate to the rental property and the rental period.

Keep:

• council rate notices

• water rate notices

• payment records

• settlement adjustments if bought or sold during the year

• records showing any private-use period

If the property was rented for only part of the year, the claim may need to be apportioned.

Example:

If the property became available for rent from 1 October, a full-year rates bill may not be fully deductible.

Dates matter.

Dates are boring.

Dates save tax returns.

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Landlord insurance

Landlord insurance and building insurance may be deductible where connected to the rental property.

Keep:

• policy documents

• premium notices

• payment receipts

• details of cover period

• records of any insurance payout

Insurance payouts also need to be checked.

For example, a lost rent insurance payout may need to be included as income.

Insurance is not just a deduction area.

Sometimes it creates income too.

Tax likes balance.

Landlords like fewer surprises.

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Loan interest

Loan interest is often the largest rental property deduction.

You may be able to claim interest on money borrowed to buy or improve the rental property.

But the purpose of the borrowing matters.

Be careful where:

• you redraw from the loan for private spending

• you refinance and increase the loan for private purposes

• the loan funds are mixed

• the property changes from private home to rental

• money is moved through redraw or offset accounts

• you borrow for both rental and private use

• the loan name does not match the actual use of the funds

The bank may call it an investment loan.

Tax law asks what the money was used for.

The bank account name is not the boss.

Very annoying for banks.

Very important for landlords.

Read the broader GoTax guide: Rental Property Tax Return 2026: Complete Guide

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Repairs and maintenance

Repairs and maintenance are common rental property deductions.

But they need to be genuine repairs or maintenance.

Examples may include:

• fixing a broken tap

• repairing a leaking roof

• patching damaged plaster

• replacing broken window glass

• repairing damaged fencing

• servicing an air conditioner

• pest control

• cleaning between tenants

• gardening during rental periods

A repair usually restores something that was damaged or worn.

Maintenance usually keeps the property in good working order.

But not every tradie invoice is an immediate deduction.

This is where landlords get caught.

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Repairs vs improvements

An improvement is different from a repair.

An improvement may:

• make the property better than before

• replace an entire structure

• add something new

• upgrade the property

• extend the property

• form part of a renovation

• change the character of the property

Examples may include:

Cost	Possible issue
Replacing an entire kitchen	Likely capital or improvement issue
Renovating a bathroom	Likely capital or improvement issue
Adding a deck	Capital improvement
Building an extension	Capital improvement
Replacing all flooring	Needs review
Installing new built-in wardrobes	Needs review
Replacing one broken tap	More likely repair
Fixing storm-damaged fencing	More likely repair, depending on facts

The invoice description matters.

But it does not decide the tax treatment by itself.

An invoice saying “repair” does not magically make a renovation deductible.

That would be too easy.

The ATO has met invoices before.

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Initial repairs

Initial repairs are a major rental property trap.

If damage or deterioration existed when you bought the property, fixing it may not be immediately deductible as a repair.

It may be capital in nature.

Example:

You buy a rental property.

The bathroom is damaged when you buy it.

You fix it before renting the property.

That may feel like a repair.

But because the problem existed when you acquired the property, the tax treatment may be different.

This catches first-year landlords all the time.

The timing matters.

The condition at purchase matters.

The reason for the work matters.

Unfortunately, “the tenant needed a bathroom” does not answer all tax questions.

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Borrowing expenses

Borrowing expenses may include costs connected to taking out a rental property loan.

Examples may include:

• loan establishment fees

• title search fees charged by the lender

• mortgage broker fees, where applicable

• stamp duty on the mortgage, where relevant

• lender’s mortgage insurance

• valuation fees required by the lender

• registration of mortgage documents

Borrowing expenses are not always claimed immediately.

They may need to be claimed over time.

Do not confuse borrowing expenses with interest.

Do not confuse borrowing expenses with purchase costs.

Do not throw every settlement item into deductions and hope the tax return sorts itself out.

It will not.

It is a tax return, not a therapist.

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Depreciation and capital works

Some rental property deductions are claimed over time rather than immediately.

This can include:

• capital works

• building construction costs

• structural improvements

• renovations

• eligible depreciating assets

• fixtures and fittings

• plant and equipment, where the rules allow

A depreciation schedule may help identify these claims.

This is especially relevant for:

• newer properties

• recently renovated properties

• properties with eligible capital works

• properties with eligible assets

• landlords who have not previously claimed depreciation

But depreciation has specific rules.

Second-hand assets, private use and ownership history can affect the claim.

A depreciation schedule is useful.

A random estimate from the internet is less useful.

Probably more exciting.

Still less useful.

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Body corporate fees and special levies

Body corporate fees can be deductible where they relate to the rental property.

But special levies need checking.

Some body corporate costs may relate to:

• normal administration

• insurance

• maintenance

• sinking fund contributions

• capital works

• major improvements

• structural repairs

The tax treatment may vary depending on what the levy funds.

A normal admin levy may be different from a special levy to fund major capital works.

Do not assume every body corporate amount is treated the same way.

Body corporate statements are often long enough to be used as emergency furniture.

Unfortunately, you still need to read them.

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Advertising for tenants

Advertising to find tenants is generally a rental-related cost.

This may include:

• online rental listing costs

• agent advertising charges

• photography for rental advertising

• signboard costs

• listing upgrade fees

Keep records showing the advertising relates to finding tenants.

If the property is genuinely available for rent, advertising supports that position.

That can matter where the property was vacant.

A property quietly waiting for tenants with no advertising may create more questions.

Properties do not rent themselves.

Unless they do, in which case please tell the rest of us.

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Cleaning, gardening and pest control

Cleaning, gardening and pest control may be deductible where connected to the rental property.

Examples may include:

• cleaning between tenants

• gardening during vacancy or rental periods

• lawn mowing required under rental arrangements

• pest treatment

• end-of-lease cleaning

• rubbish removal connected to rental use

Be careful where the cost relates to private use.

If you use the property personally, you may need to apportion expenses.

If family stays at the property and you clean after them, that is not the same as cleaning for tenants.

Family mess is not usually deductible.

Tax law is cold like that.

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Legal expenses

Some legal expenses may be deductible.

Others may be capital.

Legal costs need careful treatment.

Potential deductible legal costs may include expenses connected with:

• lease issues

• recovering unpaid rent

• tenant disputes

• rental management issues

Legal costs that relate to buying or selling the property, defending ownership, or capital matters may need different treatment.

Do not assume every solicitor invoice is a rental deduction.

Lawyers can be expensive.

That does not make them immediately deductible.

A brutal sentence.

Still true.

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What you generally cannot claim

Be careful with these:

Cost	Why it may not be claimable immediately
Private-use periods	Private use must be excluded
Travel to inspect residential rental property	Generally not deductible unless an exception applies
Improvements	Usually capital, not immediate repairs
Initial repairs	May be capital if issues existed at purchase
Purchase costs	Usually capital or cost-base related
Sale costs	Usually CGT/cost-base related
Principal loan repayments	Not deductible interest
Private redraw interest	Private purpose interest must be excluded
Family holiday costs	Private use
Furniture used privately	Private use issue
Costs with no records	Weak claim
ATO interest charges incurred from 1 July 2025	Generally no longer deductible

That last one matters for 2026.

If the ATO charges general interest charge or shortfall interest charge from 1 July 2025, it is no longer deductible.

So do not treat ATO debt interest like rental property interest.

One is connected to the rental loan.

The other is the ATO politely charging you for being late.

Politely may be generous.

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What if the property was partly private?

Private use must be removed.

This can happen with:

• holiday homes

• Airbnb properties

• family stays

• friends staying rent-free

• discounted rent to relatives

• owners blocking out peak holiday periods

• properties only sometimes available for rent

• properties changed from home to rental during the year

• properties changed from rental to private use during the year

If the property is not rented or genuinely available for rent for part of the year, the expenses may need to be apportioned.

The calendar matters.

The rent charged matters.

The availability matters.

A holiday home listed online for two quiet weeks in winter while Christmas is blocked for family use may not get the same deduction result as a genuinely available rental property.

The ATO has a strong interest in beach houses.

Sadly, not for holidays.

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Records you need for rental deductions

Keep records for each deduction.

Useful records include:

• property manager annual statement

• monthly rental statements

• loan interest summary

• council rate notices

• water rate notices

• insurance invoices

• body corporate statements

• repair invoices

• maintenance invoices

• cleaning invoices

• gardening invoices

• pest control invoices

• borrowing expense documents

• depreciation schedule

• quantity surveyor report

• settlement statement

• legal invoices

• advertising invoices

• bank statements

• short-term rental platform statements

• calendar showing rental and private-use periods

• notes explaining repairs or improvements

• photos or reports supporting repair claims

The best record is not just a receipt.

It is a receipt that explains what happened, why it happened, and how it relates to rental income.

A vague invoice creates a vague claim.

Vague claims make tax agents sigh.

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Property manager statement: useful, but not enough

Your property manager statement may include many deductions.

But it often does not include everything.

You may still need to provide:

• loan interest

• council rates paid by you

• insurance paid directly

• body corporate statements

• depreciation schedule

• borrowing expense records

• repairs paid directly

• settlement adjustments

• legal costs

• land tax

• bank fees

• short-term rental income outside the agent

• private-use details

Do not just upload the agent statement and call it done.

The agent statement is a good start.

The rental tax return still needs the rest of the paperwork.

A property manager manages the property.

They do not manage your entire tax life.

Which is probably for the best.

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How GoTax helps

GoTax helps rental property owners complete tax returns online.

The system prompts you through rental income and expense areas, and your return is checked by registered tax agents before lodgement.

That can help with:

• rental income

• property manager statements

• loan interest

• rates and insurance

• repairs and maintenance

• capital improvements

• depreciation

• body corporate fees

• private-use adjustments

• holiday homes

• short-term rentals

• records

• common ATO traps

GoTax rental property tax returns start at:

$109 for one rental property

Additional rental properties are:

$40 per additional rental property

Start your rental property tax return online with GoTax

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Quick checklist before claiming rental deductions

Before lodging, check:

• Was the property rented or genuinely available for rent?

• Have you declared all rental income?

• Do you have the property manager statement?

• Do you have the loan interest summary?

• Did you include rates, insurance and body corporate fees?

• Did you separate repairs from improvements?

• Did you check initial repairs?

• Did you avoid residential rental travel claims unless an exception applies?

• Did you remove private-use periods?

• Did you keep invoices and receipts?

• Did you avoid double claiming expenses paid through the agent?

• Did you check borrowing expenses?

• Did you consider depreciation or capital works?

• Did you include expenses paid outside the agent statement?

• Are the records strong enough if the ATO asks?

If not, fix it before lodging.

It is easier to clean up a rental schedule before lodgement than after a letter arrives.

ATO letters have very little charm.

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Frequently asked questions

What rental property deductions can I claim in 2026?

You may be able to claim rental expenses such as loan interest, rates, insurance, agent fees, repairs, maintenance, body corporate fees, borrowing expenses, depreciation and capital works, depending on the facts and records.

Can I claim loan interest on my rental property?

You may be able to claim interest where the borrowed money was used for the rental property. Private redraws or mixed-purpose borrowings may need apportionment.

Can I claim repairs on a rental property?

You may be able to claim genuine repairs, but improvements, renovations and initial repairs may need different tax treatment.

Can I claim travel to inspect my rental property?

Residential rental property travel expenses are generally not deductible unless an exception applies.

Can I claim expenses when the property is vacant?

You may be able to claim expenses where the property is genuinely available for rent, but private use and unavailable periods need to be considered.

Can I claim body corporate fees?

Body corporate fees may be deductible, but special levies and capital works components need checking.

Do I need a depreciation schedule?

A depreciation schedule may help if the property has eligible capital works or depreciating assets.

Is the property manager statement enough?

Not always. It may not include loan interest, insurance, council rates, depreciation, borrowing expenses or costs you paid directly.

Can GoTax help with rental property deductions?

Yes. GoTax helps Australians complete rental property tax returns online, with returns checked by registered tax agents before lodgement.

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About the Author

Written by Mark Walmsley, Chartered Accountant and Registered Tax Agent.

GoTax helps Australians complete their tax returns online, with returns checked by registered tax agents before lodgement.

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General Information Disclaimer

This article provides general information only and does not take into account your personal circumstances. Tax law can change and rental property deduction treatment depends on your property use, ownership, loan purpose, expenses, records, private use and specific facts. If you are unsure, seek advice from a registered tax agent.