It’s widely known that there are a range of benefits and tax breaks available if you own a property. Different property ownership structures have their own tax deductions, and what applies to a property investor will not apply to an owner-occupier. Knowing what you are entitled to is key if you want to make sure you are getting all the personal tax benefits you can.

Negatively Geared Properties

According to a new article published on, negatively gearing your property can deliver a range of tax breaks, especially for those who choose to rent out their properties.

Essentially, this is based on the value of the interest you are paying out for your mortgage, along with other expenses. Any losses you may incur on your property can be utilised in order to reduce your overall taxable income. Usually, the greatest tax deduction is on the interest incurred on the money you borrowed in order to buy the property.

Repairs and Maintenance Costs

Another tax benefit you can claim as a deductible is the cost of any upkeep or repairs. These are typically any costs that are connected to the restoration required due to normal wear and tear. Things such as repairing broken flooring, damaged window replacement, and repainting can all be counted, as long as they are not initial repairs.

Restorative works are different from generic home improvements; this is because the latter is regarded as capital in nature and are included within the cost base of the dwelling.

Capital Works Expenses

These differ to upkeep and repairs because they will usually be spread over a period of 40 years. Usually, with a rate of between 2.5-4%, tax deductions can apply to capital works, such as alterations, extensions, building, and structural improvements.

Depreciating Assets

Items in the home that can depreciate over time, such as heaters, curtains, AC units, ovens, and hot water systems can also be used in order to reduce your taxes. The value of the deduction is based on the actual cost of the item in question.

Tenancy Fees and Costs

Most people do not realise that any costs which are incurred as a result of preparing to rent a property out, along with legal expenses and landlord insurance premiums can also be claimed as a tax-deductible.

Renting Out a Spare Room

If you are thinking about renting out a room in your room, not only will it give you a little more income; but it will also mean you can claim some additional tax deductions. In fact, the treatment for such an arrangement mirrors any traditional rental property. The amounts you can claim with vary, and it is usually worked out based on the floor-size of the room in relation to the overall size of your property. Expenses can only ever be claimed when the room is being occupied.

In Summary

Regardless of whether you are an investor or an owner-occupier, you need to keep detailed records, including receipts and proof of purchase in order to justify your claims. The ATO offers a range of tools, including a mobile app to help you manage and track your expenses.