Tax Tips For Property Investors – preparing for Tax Time

Everyone could do with a little help come tax time and these are our 6 top Tax Tips for Property Investors.


Whether this is the first tax season you’ve faced as an investor, or they’re a veteran property investor.

We have prepared our top six property investor tax tips for you if you own a investment property/ies. Firstly to help you minimize tax time stress, maximize your tax return and avoid getting stung with unexpected charges:

  1. Keep documents of everything
  2. Set a realistic rental price
  3. Understand the impact of renting at ‘mates rates’
  4. Know what you can claim on your holiday home
  5. Claiming interest charged on your home loan, and
  6. Make the most of deductions

6 Tax Tips For Property Investors

Some things only happen once a year. Christmas, Easter, birthdays and of course, tax time. And just like gift shopping, you should never leave your list or your tax paperwork till the last minute. Staying on top of filing your documents, up to date with your administration and receipts throughout the year ensures tax time is stress and hassle-free.

So if you’re a property investor, here’s how to maximize your return when it comes to tax time.


1. Keep documents of everything.
The more proof you have filed away, the less stressful tax time will be.
The amount you profited from your investment property will be added to your taxable income – so make sure you have all bank statements showing interest too.

And you’ll need to show proof of rental income and expenses. This includes everything from letting and booking fees, from rental bond returns, and insurance payouts – anything that generates an income.


2. Set a realistic rental price.
It’s your obligation to set a fair and realistic rental price based on your property’s location, size and the current rental market. Intentionally setting an exorbitant rental fee or failing to advertise the property could get you into a lot of trouble with the taxman.

However, it is easy to take out a big mortgage and be expecting tenants to completely cover the monthly repayments or be biased and believe your investment property is worth top rental dollar.

Better to have your property rented at a fair price than no tenants at all.


3. Claiming interest on your loan.
File all loan statements as they clearly show the interest accrued will make tax time a whole lot easier. (lenders should also send you an annual statement). But remember, you can only claim interest for periods when the house was leased and you were generating a rental income.

One of the big perks of investing in property is that you can claim the interest charged on the home loan – or a portion of the interest – as a deduction.


4. The deal with ‘mates rates’.
Beware.. claiming deductions that don’t match your rental income will result in hefty penalties, unexpected tax charges and a place on the ATO’s ‘naughty’ list.
Let’s say you lease the property to family members at half the market rate, you must then divide your deduction claims in half. Failing to genuinely lease out and advertise your investment property.

Charging your mates a special discounted rental rate can also limit the deductions you can claim. Sometimes it’s easier to keep friends and business separate.


5. Know what you can claim on your holiday home.
A holiday rental property can be a smart investment – and who doesn’t love the idea of owning a beach house – Summer Bay anyone? However, just because you pay fortnightly or monthly mortgage repayments, you are only eligible for rental tax deductions for the period when the home is advertised and available for rent, and when it is rented out.

If your holiday house is used for personal or family breaks, or you lend it to friends at no cost, you cannot claim for those periods. Remember, the ATO will need to see proof of income and the associated deductions (e.g. cleaning costs, maintenance and advertising fees) so don’t try and cheat the system.


6. Make the most of deductions.
To maximize your tax return, don’t forget about all the other expenses you can claim.

Tax Tips for Property Investors – expense examples

The most common being:

Real estate management fees
Property advertising fees
Renters insurance
Council and water rates
Travel expenses to inspect your investment property
Bookkeeping fees
Cleaning at the end of a tenancy
Taxation advice relating to the property
Gardening and maintenance fees
Building and asset depreciation


There may be more things you can claim on tax than you realize. From solar garden lights to tennis court nets, see what else you could claim here.

So,don’t let tax time turn you into a stress head. By knowing your obligations and filing all related loan statements and expenses, you can enjoy a very merry EOFYS.


P.S. Need finance for your next investment property or is it a good time to refinance? We can find you the best rate for your circumstances.

Contact us here


This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.

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