Investment Property Tax Deductions: Complete List for 2026

You can claim loan interest, council rates, water rates, landlord insurance, body corporate fees, property management fees, repairs and maintenance (not capital improvements), land tax, advertising for tenants, pest control, cleaning, garden maintenance, legal fees for tenant matters, depreciation (capital works and plant & equipment), and borrowing costs spread over 5 years. Keep receipts for everything throughout the year.

Yes — loan interest on money borrowed to purchase an investment property is fully deductible. This is typically the largest deduction for most property investors. If you split the loan or used the loan for mixed purposes (e.g. partly personal), only the investment portion of interest is deductible. You cannot claim principal repayments.

Repairs restore the property to its original condition and are fully deductible in the year incurred. Capital improvements enhance or extend the property beyond its original condition — these must be depreciated over time. Replacing a broken tap: repair (deduct now). Installing a brand new kitchen where there was no kitchen: capital improvement (depreciate). Replacing a worn-out kitchen with a similar standard kitchen: arguably a repair, but check with your accountant.

No — since 1 July 2017, travel expenses to inspect or maintain your residential rental property are no longer tax deductible for individual investors. This includes flights, accommodation, and car travel. The only exceptions are certain eligible investors (e.g. carrying on a business of letting properties). The rules changed to prevent personal holidays being partially claimed as property inspections.

There are two depreciation types: Division 43 (capital works) covers the building structure at 2.5% p.a. for residential properties built after 17 July 1985. Division 40 (plant & equipment) covers removable fixtures — carpets, appliances, blinds, hot water systems. For properties purchased after 7 May 2017, Div 40 is only available for new assets you install — not second-hand items in the property at purchase. Get a quantity surveyor's depreciation schedule to maximise these claims.

Borrowing costs (loan establishment fees, mortgage broker fees, lender mortgage insurance if under 80% LVR) are deductible but must be spread over the lesser of 5 years or the loan term. For example, $3,000 in borrowing costs on a 30-year loan = $600 per year for 5 years. If the loan is paid out early, you can claim the remaining balance in that year.

Yes. Property management fees charged by your property manager are fully deductible in the year they are incurred. This typically includes letting fees (finding a tenant), ongoing management fees (usually 7–10% of rent collected), lease renewal fees, and inspection fees. Keep your annual statement from your property manager as it itemises all fees paid.