Tax Time Is Here — Property Investors, Don't Forget These 10 ATO Tips
Before lodging your tax return, it's worth checking that you've got the right records and understand how your property expenses may be treated.
The Australian Taxation Office (ATO) has released its 2026 Investors toolkit to help you check your records and understand what you can and can't claim.
The toolkit highlights 10 key areas investors should keep front of mind at tax time, including repairs, loan interest, borrowing expenses, capital works, body corporate fees, private use, record keeping and selling a property.
While investors should always speak to their accountant or registered tax agent about their personal tax position, the ATO guidance is a timely reminder that good records matter throughout the year, not just when a tax return is being prepared.
1. Get initial repairs right
Initial repairs are works needed to fix damage that existed when the property was purchased, such as painting scuffed walls or repairing damaged floorboards.
The ATO says these are capital expenses and can't be claimed straight away.
2. Don't claim purchase costs straight away
Costs associated with buying a rental property, including conveyancing fees and stamp duty, are not immediately deductible.
Instead, these costs are added to the property's cost base and may be relevant when calculating capital gains tax if the property is sold.
3. Check how loan interest is being claimed
Interest may be deductible where it relates to the rental property and earning rental income.
However, property investors can't claim interest on any part of a loan used for private expenses, such as school fees, a holiday or other personal costs.
4. Treat borrowing expenses correctly
Borrowing expenses can include loan establishment fees, title search fees, mortgage stamp duty and costs for filing mortgage documents.
If these expenses are more than $100, the deduction generally needs to be spread over five years, or the term of the loan, whichever is less.
5. Understand improvements and capital works
Extensions, alterations and structural improvements are generally treated as capital works.
The ATO says property investors can generally claim these costs over time, rather than claiming the full amount straight away.
6. Check body corporate fees
Body corporate fees can be treated differently depending on what the payment relates to.
Administration fund payments may generally be claimed in the year they are incurred, while payments into a special purpose fund for major capital works may not be immediately deductible.
7. Apportion expenses where needed
Property investors may need to reduce deductions if there is private use of the property.
This can include renting to family or friends below market rent, keeping the property vacant for private use, renting out part of a home, or renting the property for only part of the year.
8. Keep records for the full ownership period
The ATO says property investors must have evidence of rental income and expenses to claim deductions.
Records should be kept for the entire period the property is owned, and for at least five years after it is sold.
9. Be prepared when selling
Selling a rental property may result in a capital gain or capital loss.
The ATO says capital gains or losses need to be included in the tax return for the year the sale contract is signed, not the year settlement occurs.
10. Check clearance certificate requirements
Foreign resident capital gains withholding applies to Australian property disposals unless the seller is an Australian resident for tax purposes with a clearance certificate, or a foreign resident with an approved variation notice.
The withholding rate is 15 per cent.
Good records make tax time easier
Tax advice should always come from an accountant or registered tax agent, but good property management can make it easier for investors to keep the right information throughout the year.
A property manager can help investors maintain rental statements, maintenance records, invoices, inspection reports and communication records, giving them clearer information to provide to their accountant or tax agent.
For more information, view the ATO's 2026 Investors toolkit.
Looking for a property management partner?
Talk to the AZ Property team today to keep your rental statements, invoices, maintenance and inspection records organised throughout the year. Call 08 9355 2757 or send us an enquiry.
