Each end of the financial year brings a fresh set of rules, and this one is no different. The Australian Taxation Office (ATO) has its sights set on property owners, especially those with rental income, so staying sharp on the latest property investor tax tips is more important than ever.
If you own a rental property or dabble in short stays, there are key things to get across before tax time. From tax deductions on investment property to how the ATO treats capital gains tax on investment property, here's what's changed in 2025 and how to avoid any unwanted surprises.
The ATO is watching deductions more closely this year. Rental property expenses are back in the spotlight. In 2025, they're using data matching and AI to spot red flags faster.
Expect extra attention on things like:
Interest on investment loans used for personal spending
Deductions split incorrectly between personal and rental use
Repairs claimed to be capital improvements
Missing or understated income, especially from holiday homes and Airbnb-style platforms
Aussie insight: If your loan is mixed with personal use, it's time to untangle it. Keeping things separate helps you claim correctly and avoid getting tripped up.
Have a holiday home or a short-stay investment? The ATO also has new rules for holiday homes and short-term rentals: no guests = no deductions. To claim tax deductions on investment property, the place must be genuinely available to rent. That means:
You can't claim it during personal stays or for family use.
It needs to be realistically listed, not overpriced or blocked out.
Since July 2024, NSW, VIC, and WA have fed short-stay data straight to the ATO.
So, if your short-term rental sat empty for long stretches last financial year, ensure your records show when it was on the market.
What can you claim on tax for an investment property in Australia?
If you own an investment property, tax time isn't just about ticking boxes; it's a chance to make the most of what you've spent across the year. From loan interest to maintenance costs, plenty of potential deductions could reduce what you owe or increase what you get back.
But it's not always clear what counts (and what doesn't).
So, we've broken down some of the most common tax deductions for property investors to help you claim with confidence and avoid the common traps.
Negative gearing losses
A negatively geared property is one where the investor's property expenses (e.g. mortgage repayments) outweigh their rental income. This results in losses, which are generally tax deductible. If your rental property hasn't generated as much income as you would have liked, you may be able to take advantage of some extra tax benefits.
Work-from-home expenses.
While this point is less related to property investment, many investors may have worked from home over the last financial year. The ATO's website provides a comprehensive guide on how to claim working-from-home expenses. Remember that you can't claim personal expenses like coffee and toilet paper. Doing so could land you in trouble should the ATO investigate your claims.
If you don't know whether an expense can be claimed, contact a reliable tax accountant or the ATO.
Capital gains tax discount
If you've sold your investment property that you've held for over a year, you can apply for a 50% capital gains tax discount.
Home loan interest and fees
One of the biggest tax deductions property investors can claim is home loan interest. The interest you pay on your mortgage and home loan fees (e.g., offset account fees or administrative fees) can be claimed. However, if you've cashed out some of your equity to use for private purposes (e.g. to pay for a car), you won't be able to claim interest on this portion of the loan.
Property maintenance and repairs
Most repairs and general maintenance can be claimed as tax deductions. However, ensure you aren't claiming improvements as repairs or maintenance. For example, if you claim repairs you've made to a damaged fence, you'll have to use the same materials as the original fence. If you used enhanced materials to repair the fence, this is likely an improvement.
Depreciation
Renovations and home improvements aren't typically able to be claimed immediately, but you can generally claim depreciation or capital works deduction in the future. This also applies to new appliances that you've installed.
Property management
Do you have a property manager taking care of the day-to-day running of your investment property? You can claim your property management fees in your tax return.
Others
Some other common tax deductions you may be eligible to claim include:
Strata or body corporate fees
Council and water rates that the tenant doesn't pay
Costs of advertising to find tenants (e.g. property photography or money spent on property listing websites)
Cleaning
Pest control
Stationery
What do I need to know about capital gains tax on investment property?
Let's talk about CGT. It's easy to put it aside until you're ready to sell. But getting your head around capital gains tax on investment property now could save you a decent sum come tax time. CGT applies to the profit if you sell a property for more than you paid. Sounds simple enough. But without smart planning, a chunk of that gain could go straight to the ATO.
Here are some of our top property investor tax tips to help you get ahead before 30 June.
Timing matters. CGT is triggered at settlement, not contract. That means if settlement lands before 30 June, the gain goes into this year's return. Push it to after 1 July, and you have a full financial year to prepare or reduce your income for a better outcome.
Hold for 12+ months? You could save 50%. Own the property for over a year? You might qualify for a 50% CGT discount. That's a big win, especially if you've built up equity in a high-growth area. Even waiting a few weeks to hit the 12-month mark could be worth it.
Offset with losses. If you've sold another property or asset at a loss, you can use it to offset your capital gain. But make sure your records are current so you can claim the deduction properly.
Know what's exempt and what's not. Your main home (Primary Place Of Residence) is usually CGT-free. But if you've rented it out or used it to generate income, you may need to pay CGT on part of the gain. The ATO is closely monitoring short-term rentals and homes converted into investment properties. Clear usage records, intent, and valuations will help if questions arise.
Repairs vs capital works. Some tax deductions on investment property, like repairs made before selling, can reduce your taxable gain. Just be careful: capital improvements fall into a different bucket. An accountant can help you get this right.
CGT doesn't have to catch you off guard. With the right support and these smart EOFY tax tips in Australia designed to help you retain more of what you've earned, you can stay in control of your outcome. If you're tossing up whether to sell, renovate, refinance, or reinvest, chat with your local Aussie Broker. We're here to help you make the most of it.
You might also be interested in: Understanding taxes when buying and selling a home in Australia
How can depreciation schedules boost your return?
Here's one of the most underused property investor tax tips, and it could be putting real money back in your pocket. If you haven't set up a depreciation schedule for your investment property, you're missing out on thousands in potential tax deductions on investment property costs.
Let's break it down.
But first, what's a depreciation schedule, and why does it matter? A depreciation schedule is a report prepared by a qualified quantity surveyor. It outlines how much value your property (and everything inside it) loses over time, from the walls and structure to carpets, dishwashers and hot water systems.
You can legally claim that loss as a deduction even if you haven't spent anything new.
Aussie tip: You don't need to renovate or replace appliances to benefit. You just need the report.
Depreciation is grouped into two categories:
Capital works (Division 43): This covers the building itself, things like brickwork, walls, concrete, and roofing.
Plant and equipment (Division 40): These are removable or mechanical items like blinds, flooring, ovens and A/C units.
If your property was built after 1987, you're likely eligible to claim for capital works. Your deductions could be even more generous if it's been recently built or renovated.
Pro tip: Even if your property is older, a quantity surveyor can assess it and uncover potential claims based on the construction date and past upgrades.
How does a depreciation schedule help at tax time?
Once set up, your accountant can use the schedule to apply the correct deductions every year. No guesswork. No scrambling for receipts. Just reliable, long-term savings are especially helpful in your early years of renting a rental. A set-and-forget tool that keeps working for you.
Most reports cost a few hundred dollars. But in many cases, the first year's tax return can cover that cost and then some. Plus, the report itself is deductible.
Sorting your depreciation schedule is one of those behind-the-scenes wins that makes tax time easier and more rewarding. For smart investors looking to maximise their return, it's a no-brainer.
You might also be interested in: Perks of buying a car during EOFY
How can you get tax time ready for this EOFY?
When it comes to end-of-financial-year prep, a little forward-thinking can go a long way, especially if you own investment property.
Whether it's your first tax return as a landlord or you've been doing this for years, getting organised now could mean bigger deductions, fewer headaches and better results.
From record-keeping to CGT, here are a few smart moves to help you feel confident, stay compliant and get the most out of your return this EOFY.
1. Keep records of everything related to your property.
One way to get the most out of your tax return is to be exceptionally organised when keeping records of all property-related expenses and documents. Keep receipts from property expenses and documentation of damage and repairs.
If the Australian Taxation Office (ATO) audits your tax return and you cannot provide evidence of your claims, you could be denied these deductions or even face penalties.
Consider keeping both physical and digital copies of receipts and other documents that can support your tax deduction claims. This will make it easier come tax time.
2. Consider getting a tax accountant.
Time is money, and doing your taxes yourself can be complicated, time-consuming and stressful – even more so as a property investor. A tax accountant can help ensure you comply with tax laws and help optimise your tax return and deductions.
Don't just go with any old tax accountant; spend time researching for a reliable and trustworthy one. If you have friends who own investment properties, consider reaching out to them for potential recommendations.
3. Start thinking about the next financial year.
As mentioned, being organised is crucial if you're going to own rental properties. Think about any renovation you intend to undertake on your investment property and any repairs needed. Getting them done before 30 June means you can claim the costs as a deduction in the following tax return.
4. Apply for a PAYG withholding variation.
Property investors often wait until the end of the financial year to claim expenses and the interest paid on their home loan as tax deductions. This means you'll get your tax refund in a single lump sum once per year. While this isn't necessarily a bad strategy, it can create cash flow problems for some investors. Alternatively, you can apply for a PAYG withholding variation with the ATO.
This enables you to spread the tax you pay yearly and receive tax deductions more frequently. Discussing a PAYG withholding variation with your financial advisor or accountant is a good idea, as they could help determine whether it's a good move for you.
They can guide you on how much to adjust your PAYG so you don't have to reimburse the ATO when you lodge your tax return.
5. Get your capital gains tax right.
House prices have reached record highs in many parts of Australia over the past year. If you have sold an investment property during the past financial year, you likely will be required to pay CGT.
The CGT rate is usually the same as your income tax rate for that financial year. If you have held the investment property for over a year, you can apply for a 50% capital gains tax discount. It's crucial to record your capital gains correctly in your tax return to avoid facing penalties.
CGT can also be charged for other investment capital gains, e.g., shares and cryptocurrency.
Investors who have made a capital loss do not have to pay CGT.
What common mistakes should I avoid this EOFY?
Even the most experienced investors can get caught out at tax time. With the ATO using smarter tech and data-sharing to scan returns in 2025, it pays to double-check your details. So, before you hit submit, here are some easy-to-miss traps and practical property investor tax tips to help you steer clear of trouble and make the most of your deductions.
Mixing personal and investment expenses.
Using the same account or loan for your home and investment property might seem convenient, but it can make your tax deductions on investment property harder to claim. The ATO expects a clear split between personal and investment expenses.
Not updating your depreciation schedule.
Think your depreciation schedule is set-and-forget? Think again. If you've renovated or added new appliances, you must update your schedule to claim what you're entitled to. Missing this step could mean leaving thousands in deductions on the table year after year.
A quantity surveyor can update your schedule; the report cost is also tax-deductible.
Over-claiming repairs and maintenance.
There's a fine line between a repair and a renovation, which matters at tax time. Fixing a leaky tap is a repair (and immediately deductible). Replacing the whole bathroom is a capital improvement (and must be claimed over time).
You could be penalised or lose part of your refund if you get it wrong. If unsure, check with your accountant or use ATO guidance tools. It's better to ask early than address it later.
Forgetting rental income from short stays.
Platforms like Airbnb and Stayz now share data with the ATO. So, if you skip over rental income from your short-stay property, you will likely get flagged. This is especially important for holiday homes. You can only claim tax deductions on investment property when it's available for rent, not during family stays or when it's blocked out.
Leaving it all to the last minute.
Trying to pull everything together on 29 June is a recipe for missed deductions and avoidable errors. One of the best EOFY tax tips in Australia is simple: get organised early. Keep your receipts, review your records, and plan, not the night before your tax appointment.
Avoiding these slip-ups means less stress and more certainty and ensures you claim every dollar you're legally entitled to. If you want a second set of eyes before tax time, your local Aussie Broker can work with your accountant to ensure your loan is structured properly, your claims are on point, and your investment strategy works as hard as you are.
Frequently asked tax questions for property investors
Let's face it: tax time can raise many questions, especially when property is involved. Even seasoned investors can get tripped up on the finer details. So, to help take the stress out of EOFY, we've answered some of the most common questions property investors search online.
Can I claim repairs made before renting out a property?
Generally no. Any work done before renting out your investment property is considered a capital expense, not an immediate deduction. Repairs done after tenants move in may be claimable immediately, but only if they're genuine repairs (e.g., fixing a leak), not upgrades or renovations.
Hang on to every receipt and keep track of dates. Timing makes all the difference here.
Is loan interest tax deductible on an investment property?
Yes, but only for the portion used for investment purposes. You can't claim that slice of interest if you've redrawn or refinanced for personal reasons (like buying a car or taking a holiday). Structured loan splits and good record-keeping are key. Your Aussie Broker can help set this up properly so your claims stay on track.
What does the ATO look for in property investor returns?
In 2025, the ATO is focusing on:
Accurate reporting of rental income (including Airbnb and short-stay platforms).
Over-claimed loan interest or incorrectly split expenses.
Deductions claimed during periods when the property wasn't available for rent.
Mistaken repair vs. capital improvement claims.
Missing or outdated depreciation schedule reports.
With data-matching and AI now in play, accuracy matters more than ever. If something doesn't add up, the ATO will likely spot it, so double-check your return or talk to your accountant before lodging.
Get tax time ready with Aussie.
EOFY doesn't have to be overwhelming, not when you have the right tools (and people) in your corner. Whether you're sorting your statements, checking in on your investment loan, or figuring out the next steps, Aussie's here to help you make it all a bit easier.
Here's how we can back you in and make this tax season smarter, not harder.
Need to know what your property's worth or how much equity you've built? Track your property and equity with the Aussie App. Our app gives you a personalised dashboard that helps you:
See updated values on your home and investment properties.
Monitor market changes in real-time.
Estimate usable equity for your next move, whether it's refinancing, renovating or reinvesting.
If you're considering selling, this tool helps you factor in capital gains tax on investment property before you make the decision.
Use our free tools to run the numbers. Some of Australia's best EOFY tax tips start with knowing where you stand. Use these tools to get clearer on your cash flow and potential:
Borrowing power calculator: See how much you could borrow with your current income and expenses.
Repayments calculator: Test out different loan scenarios and payment strategies.
Property report generator: Download suburb-specific insights, including price trends, rental yields and estimated values.
These tools can help flag untapped tax deductions on investment property or opportunities to do things smarter next year.
One of the most underrated property investor tax tips? Chat with an Aussie Broker who sees the full picture. Get someone who understands more than just tax. Our brokers are trained to help you:
Review your loan to make sure it's still tax-effective.
Identify equity opportunities you could be using.
Connect you with quantity surveyors to sort your depreciation schedule.
EOFY is the time to reflect on your claim and move forward with what you can build next. Tax time doesn't have to be stressful.
With the right tools, a supportive broker, and a clear view of your finances, EOFY can be your opportunity to reset, refocus and make your investment strategy work even harder. If you're ready to take action, your local Aussie Broker is just a call or a tap in the app away.
