Maximise Your Profits with These Investment Property Tax Breaks

Owning investment property in Australia can be a lucrative venture—but only if you’re fully leveraging the tax deductions available to you. Whether you're an Aussie expat managing real estate from overseas or a foreign business investing in the Australian market, understanding how to maximise deductions is crucial to protecting your bottom line.

At Worldwide Advisory, we work with property owners around the globe to ensure no opportunity is left unclaimed when it comes to tax time.

Why Tax Deductions Matter for Property Investors

Every dollar you claim as a legitimate deduction directly reduces your taxable rental income, potentially saving thousands in tax each year. But with ATO scrutiny increasing—especially for expats and foreign owners—it’s more important than ever to document accurately and claim only what you’re entitled to.

Top Tax Deductions You Shouldn’t Miss

1. Depreciation on Building and Fixtures

If your investment property was built after 16 September 1987, you may be eligible to claim capital works deductions (i.e., depreciation) for up to 40 years. Additionally, plant and equipment items (such as carpets, air conditioners, and appliances) may be depreciable—especially if purchased and installed by you.

Tip: A Quantity Surveyor’s Depreciation Schedule is often required to substantiate these claims.

2. Repairs vs. Improvements

• Repairs and maintenance (e.g., fixing a leaking tap or repainting due to tenant damage) are immediately deductible.

• Improvements (e.g., upgrading a kitchen or adding a pergola) must be capitalised and depreciated over time.

The distinction is critical—misclassifying these expenses can trigger ATO audits or lost deductions.

3. Loan Interest

If you’ve borrowed to purchase or renovate your rental property, interest on the loan is fully deductible. This includes redraws used for the property’s upkeep, but not for personal expenses.

4. Property Management and Administration Fees

Fees paid to real estate agents, body corporate charges, bookkeeping services, and professional accounting fees related to your investment are claimable in the year they’re incurred.

5. Travel Expenses (limited)

Since July 2017, travel expenses to inspect or maintain rental properties are no longer deductible for individual investors. However, corporate entities and certain trusts may still qualify, especially offshore businesses operating under structured entities.

6. Insurance Premiums

Landlord insurance, building insurance, and contents insurance are fully deductible. This is often overlooked, but can add up to significant savings.

7. Utilities and Council Rates

If you, as the owner, pay for utilities, strata fees, or council rates (instead of the tenant), these are fully deductible in the year they’re paid.

For Aussie Expats: Stay Ahead of ATO Changes

If you’re living overseas but own property in Australia, here’s what you need to know:

• Rental income is still taxable in Australia, regardless of where you reside.

• Depreciation and other deductions are still available, but must be correctly reported.

• Improper classification of expenses, or failure to declare rental income, can flag ATO audits, especially under data-matching programs with international tax authorities.

For Offshore Investors Entering the Market

If you're a foreign entity investing in Australian real estate:

• Ensure ownership structures are set up to allow access to deductions (company vs trust).

• Understand your Withholding Tax obligations on profits or sales.

• Plan for FIRB approval, land tax, and CGT—especially on exit.

• Claiming depreciation may require early action like obtaining a Depreciation Schedule before a tenant moves in.

Don’t Leave Money on the Table

Many investment property owners miss out on thousands in deductions every year simply due to lack of awareness or poor record-keeping. By working with a qualified tax consultant, you can ensure all eligible deductions are identified and claimed with confidence.

Talk to the Experts at Worldwide Advisory

Whether you're an Aussie expat, a foreign business entering the property market, or a local investor with complex affairs, we help property owners maximise returns while staying fully compliant with ATO requirements.

📞 Call us today at +617 3180 1684

📧 Or email contact@worldwideadvisory.au

Let’s make sure your investment property works harder for you this tax season.