Rental Property Tax Return 2026: Complete Guide

If you owned a rental property in 2026, you generally need to include the rental income in your tax return.

You may also be able to claim rental property expenses, provided the property was rented out or genuinely available for rent, the expense relates to earning rental income, and you keep proper records.

That is the tidy version.

The real-life version usually includes a property manager statement, loan interest, council rates, insurance, repairs, water bills, body corporate fees, depreciation, missing receipts and one invoice that says “works completed” with no useful detail whatsoever.

Lovely.

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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Who this guide is for

This guide is for Australians who owned a residential rental property during the 2026 financial year.

That may include:

• first-time landlords

• long-term property investors

• people with one rental property

• people with multiple rental properties

• owners with a property manager

• owners managing the property themselves

• people with a newly rented former home

• people with a holiday home or short-term rental

• people with rental income and employment income

• people with rental income and ABN income

If you owned a rental property, your tax return needs to deal with the rental income and the rental expenses properly.

The property manager statement is helpful.

It is not always the whole story.

Tax time likes hiding the rest of the story in bank statements.

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What is a rental property tax return?

A rental property tax return is usually an individual tax return that includes rental income and rental property expenses.

Your tax return may include:

• rent received

• agent fees

• loan interest

• council rates

• water rates

• insurance

• body corporate fees

• repairs

• maintenance

• capital works

• depreciation

• advertising for tenants

• property management costs

• land tax, where relevant

• legal costs, where relevant

• borrowing expenses

• bank fees

• rental losses

• private-use adjustments

• co-owner shares

If the rental income is more than the deductible expenses, the rental property may produce taxable income.

If the deductible expenses are more than the rental income, the property may produce a rental loss.

Either way, the details need to be reported correctly.

A rental property is not just “rent minus whatever the agent statement says”.

That is a starting point.

Not the finish line.

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Rental income you need to declare

Rental income is not just rent paid directly into your personal bank account.

Rental income may include:

• rent paid by tenants

• rent paid to your property manager

• short-term accommodation income

• Airbnb or holiday rental income

• insurance payouts for lost rent

• tenant reimbursements

• bond money you are entitled to keep

• letting or booking fees received

• amounts paid by tenants for utilities or other costs

• overseas rental income

If the tenant pays rent to your property manager, the income still needs to be included.

Do not wait until the money lands in your personal account if it has already been received by the agent on your behalf.

The agent is not a tax invisibility cloak.

Useful, yes.

Magical, no.

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What if the property was vacant?

A vacant property can still create deductible expenses in some situations.

But the property generally needs to be genuinely available for rent.

That means you need to consider things like:

• was the property advertised?

• was the rent commercially realistic?

• was it available to tenants?

• were there unreasonable restrictions?

• was it being repaired between tenants?

• was it held for private use?

• was it used as a holiday home?

• was it actually ready to rent?

If a property is genuinely available for rent, the position may be different from a property held for private use.

A rental property sitting empty while you try to find a tenant is one thing.

A beach house blocked out for family holidays during peak season is another.

The ATO has a habit of noticing the difference.

So should the tax return.

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Common rental property deductions

Common rental property deductions may include:

• property management fees

• advertising for tenants

• council rates

• water rates

• body corporate fees

• landlord insurance

• building insurance

• pest control

• cleaning

• gardening

• repairs

• maintenance

• bank fees

• loan interest

• borrowing expenses

• stationery and postage

• tax agent fees

• quantity surveyor fees

• depreciation and capital works deductions, where applicable

The expense must relate to the rental property and the period it was rented or genuinely available for rent.

If part of the expense is private, the private part needs to be removed.

If part of the property was used privately, the claim may need to be apportioned.

Rental deductions are useful.

Rental deductions with no support are less useful.

That is where the ATO gets a pen and starts circling things.

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Rental property loan interest

Loan interest is often the biggest rental property deduction.

But it needs to relate to the rental property.

You may be able to claim interest on a loan used to:

• purchase the rental property

• repair the rental property

• improve the rental property, subject to the correct tax treatment

• fund rental-related costs

But problems can arise where the loan is also used for private purposes.

For example:

• redrawing from the rental loan to buy a private car

• using rental loan funds for a holiday

• mixing rental and private borrowings

• refinancing and increasing the loan for private spending

• using loan funds for family expenses

• moving money between offset and loan accounts without tracking the purpose

The bank might call it an investment loan.

That does not automatically make all interest deductible.

The tax question is:

What was the borrowed money used for?

Banks name accounts.

Tax law follows purpose.

Very inconvenient.

Very important.

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Property manager statements are not always enough

A property manager statement is useful.

It may show:

• rent received

• agent fees

• repairs paid by the agent

• maintenance costs

• advertising

• cleaning

• water bills

• owner payments

• net amount transferred to you

But it may not show everything.

You may also need:

• loan interest summaries

• council rate notices

• water rate notices

• insurance documents

• body corporate statements

• land tax records

• bank fees

• depreciation schedules

• capital works records

• invoices paid directly by you

• settlement statement if purchased during the year

• repair invoices with detail

• records of private use

• records of vacancy periods

• short-term rental platform statements

Do not assume the agent statement has captured the whole tax position.

It often captures the property manager’s part of the story.

The tax return needs the whole story.

Like a crime scene, but with more council rates.

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Repairs vs improvements

This is one of the biggest rental property tax traps.

A repair usually restores something that was damaged or worn from renting the property.

An improvement usually makes the property better than it was, changes its character, or forms part of a larger upgrade.

Examples may include:

Item	Possible treatment
Fixing a broken window	Repair
Replacing damaged roof tiles	Repair
Repairing a leaking tap	Repair
Replacing an entire kitchen	Improvement
Adding a deck	Improvement
Renovating a bathroom	Improvement
Replacing old carpet with new flooring	May need careful review
Fixing damage that existed when you bought the property	Often not an immediate repair

The words on the invoice matter.

But they are not everything.

An invoice saying “repairs” does not automatically make it deductible immediately.

An invoice saying “maintenance” may still include capital work.

An invoice saying “general works” is basically tax fog.

If the invoice is vague, get more detail.

Future you will be grateful.

Current you may grumble.

That is normal.

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Initial repairs

Initial repairs are a common trap.

If damage, defects or deterioration existed when you bought the property, costs to fix those issues may not be immediately deductible as repairs.

They may be capital in nature.

This can surprise new landlords.

Example:

You buy a rental property.

Before or soon after renting it, you fix existing damage.

That may feel like a repair.

But if the issue was already there when you bought the property, the tax treatment may be different.

The timing matters.

The cause matters.

The purpose matters.

Tax law is fussy because apparently saying “I fixed something” was too easy.

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Capital works and depreciation

Some rental property costs are not claimed immediately.

They may be claimed over time.

This can include:

• building construction costs

• structural improvements

• renovations

• extensions

• major improvements

• certain fixtures

• capital works

• depreciating assets

This is where a depreciation schedule or quantity surveyor report may be useful.

Examples can include:

• capital works deductions for building structure

• depreciation for eligible plant and equipment

• improvements claimed over time

• assets treated differently from repairs

Do not throw major renovation costs into repairs just because you would like the deduction now.

The ATO is not running a wish-granting department.

If the cost is capital, it needs the right treatment.

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Travel to inspect a rental property

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

This catches many landlords.

Examples that may be problematic include:

• driving to inspect the property

• flights to visit an interstate rental

• accommodation while inspecting a property

• meals during a rental property trip

• travel to meet a property manager

• travel to do maintenance

There are exceptions in limited circumstances, such as where the property is not a residential rental property or where the owner is carrying on a business of letting rental properties.

But ordinary individual landlords need to be careful.

Going to inspect your rental is not automatically deductible.

Going to inspect your rental near a beach is even less magically deductible.

The beach did not help.

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Holiday homes and short-term rentals

Holiday homes and short-term rentals need special care.

This can include properties listed through:

• Airbnb

• Stayz

• Booking.com

• short-term rental platforms

• local holiday rental agents

• private booking arrangements

The key issues often include:

• how many days the property was rented

• how many days it was available for rent

• whether the rent was commercial

• whether peak periods were blocked for private use

• whether family or friends used the property

• whether the property was genuinely available

• whether expenses need to be apportioned

• whether the activity is investment or business-like

A holiday home that is occasionally rented is not always treated the same as a long-term rental property.

Private use matters.

Blocked-out dates matter.

Discounted family use matters.

The calendar matters.

Which is unfortunate, because the calendar often tells on people.

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Co-owned rental properties

If you co-own a rental property, the rental income and expenses are usually split according to the legal ownership interest.

For example:

Ownership	Income and expenses
50/50 owners	Usually split 50/50
70/30 owners	Usually split 70/30
Joint tenants	Usually equal shares
Tenants in common	Usually based on legal percentage

Do not simply split the tax result based on who paid the bills or who wants the bigger deduction.

The legal ownership usually matters.

If one owner paid more of the expenses, that may be a private arrangement between the owners.

The tax return still needs the correct ownership split.

Tax law is not interested in household negotiations.

A bold choice, but here we are.

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Rental losses and negative gearing

A rental loss happens when deductible rental expenses exceed rental income.

People often call this negative gearing.

A rental loss may reduce taxable income, depending on your overall situation.

But a rental loss does not automatically mean a refund.

Your final tax result depends on:

• employment income

• tax withheld

• other income

• deductions

• rental income

• rental expenses

• Medicare levy

• offsets

• HELP debt

• prior year issues

• ATO processing

Negative gearing is not a refund machine.

It is a tax outcome based on numbers.

Less catchy.

More accurate.

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Records you need for a rental property tax return

Rental property owners should keep records that show:

• rent received

• rental expenses paid

• loan interest

• property management fees

• repairs and maintenance

• capital improvements

• private use

• availability for rent

• short-term rental bookings

• ownership percentage

• GST, if relevant

• depreciation and capital works

• settlement costs

• borrowing expenses

Useful documents include:

• property manager annual statement

• monthly rental statements

• lease agreement

• bank statements

• loan interest summary

• council rates notices

• water rates notices

• insurance invoices

• body corporate statements

• repair invoices

• maintenance invoices

• depreciation schedule

• quantity surveyor report

• land tax assessment

• settlement statement

• short-term rental platform reports

• calendar showing availability and private use

• correspondence with property manager

• photos or reports for repairs, where relevant

If a deduction is claimed, you should be able to explain it.

Preferably with records.

Not with interpretive dance.

Although that would make audits more memorable.

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Common rental property tax mistakes

Avoid these:

Mistake	Why it matters
Not declaring all rent	Rental income must be included
Relying only on the property manager statement	It may not show all expenses
Claiming private use	Private use must be removed
Claiming travel incorrectly	Residential rental travel is generally not deductible
Claiming improvements as repairs	Capital costs need correct treatment
Claiming initial repairs immediately	May be capital in nature
Claiming all loan interest	Private redraws may need apportionment
Double claiming expenses	Agent-paid expenses may already be included
Missing loan interest	Often not in the agent statement
Missing depreciation	May need a schedule
No invoices for repairs	Weakens the deduction
Wrong co-owner split	Legal ownership usually matters
Ignoring short-term rental private use	Availability and private use matter

The goal is not to claim the most aggressive number.

The goal is to claim the correct number.

A good rental schedule should survive questions.

That is the boring but excellent version of tax planning.

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What GoTax needs from you

For a rental property tax return, GoTax may need:

• property address

• ownership percentage

• date first rented

• rent received

• property manager statement

• loan interest summary

• council rates

• water rates

• insurance

• body corporate fees

• repairs and maintenance details

• capital improvements

• depreciation schedule, if available

• land tax, if applicable

• borrowing expenses

• bank fees

• private-use details

• short-term rental platform statements

• settlement statement if bought or sold during the year

• details of any vacancy period

You do not need to become a tax expert.

You do need to provide the right information.

That is the trade.

GoTax makes the process simpler, but it cannot see the invoice you left in the glovebox.

Yet.

Probably best we cannot.

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GoTax rental property tax return price

GoTax rental property tax returns start at:

$109 for one rental property

Additional rental properties are:

$40 per additional rental property

That gives rental property owners a simple online option without appointment-based accountant pricing.

Complete your return online.

Add your rental details.

GoTax checks the return before lodgement.

No office visit.

No waiting room magazines from 2017.

Start your rental property tax return online with GoTax

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Quick rental property checklist before lodging

Before you lodge, check:

• Have you declared all rent?

• Did you include rent paid to the property manager?

• Did you include short-term rental income?

• Do you have the property manager statement?

• Do you have the loan interest summary?

• Did you include council and water rates?

• Did you include insurance?

• Did you include 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?

• Did you split income and expenses by ownership percentage?

• Do you have invoices for repairs?

• Do you have a depreciation schedule if relevant?

• Did you avoid double claiming expenses?

• Are your records clear?

If not, tidy the records before lodging.

It is easier to fix the rental schedule before lodgement than after the ATO asks why the “repair” looks suspiciously like a new kitchen.

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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

• repairs and maintenance

• capital improvements

• depreciation

• private-use adjustments

• holiday homes

• short-term rental income

• co-owner splits

• rental losses

• common ATO traps

• record issues

GoTax does not make unsupported rental claims safe.

It helps you lodge properly.

That is the point.

Rental property tax is not hard because landlords are silly.

It is hard because property expenses are messy and tax law likes tidy boxes.

We help put things in the right boxes.

Start your rental property tax return online with GoTax

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Frequently asked questions

Do I need to declare rental income in 2026?

Yes. If you received rental income during the 2026 financial year, it generally needs to be included in your tax return.

Does rent paid to my property manager count as income?

Yes. Rent paid to your property manager or agent is still rental income, even if the net amount is transferred to you later.

Can I claim loan interest on my rental property?

You may be able to claim interest on money borrowed for the rental property, but private redraws or mixed-purpose loans may need apportionment.

Can I claim repairs on my rental property?

You may be able to claim genuine repairs, but improvements, capital works 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 if the property was vacant?

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

Do I need a depreciation schedule?

You may need a depreciation schedule if you are claiming capital works or depreciating assets. It can be especially useful for newer properties or properties with eligible improvements.

How long should I keep rental property records?

Rental property records should generally be kept for five years. Some records may also be needed later for capital gains tax purposes.

How much does GoTax charge for a rental property tax return?

GoTax rental property tax returns are $109 for one rental property, plus $40 for each additional rental property.

Can GoTax help with rental property tax returns?

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 tax treatment depends on your income, property use, ownership, loan purpose, records, repairs, private use and specific facts. If you are unsure, seek advice from a registered tax agent.