Rental Property Tax Return

Investment Property Tax Agent Sydney

Owning a rental property can be rewarding, but it also comes with complex tax obligations. From declaring rental income to claiming deductions and avoiding ATO audit triggers, we make the process simple and accurate.

Rental Property Tax Return - What We Do

• Prepare and lodge rental property tax returns for individuals and investors.
• Ensure all rental income is declared (including Airbnb and short-term rentals).
• Identify and claim every eligible deduction to maximise your refund.
• Provide ATO-compliant record-keeping guidance.
• Splitting settlement costs between capital costs, borrowing costs & rental deductions.
• Analysing Mortgage Statements for redraws & recalculating interest expenses where necessary.
• Rental property depreciation schedules.
• Reviewing repairs Vs capital costs.
• Cash Flow Boost - PAYG Withholding Tax Variations to increase your net pay.
• Setting up your capital gains tax (CGT) file in your first year of being our client.
• Assist with capital gains tax (CGT) when selling your property.

Rental Property Income You Must Declare

According to the ATO, you must include:

• Gross rental income (weekly rent, Airbnb, holiday rentals).
• Bond money retained from tenants.
• Insurance payouts for lost rent or property damage.
• Reimbursements from tenants for expenses like water or repairs.

Rental Property Deductions You Can Claim

Here are the most common deductions allowed by the ATO:

• Loan Interest – Interest on your mortgage (not principal). Adjusted for Redraws.
• Repairs & Maintenance – Fixing damage or wear (not improvements).
• Smoke Alarm Test – Claim the annual smoke alarm subscription.
• Property Management Fees – Agent fees, advertising, letting fees, EOY Statement Fees.
• Council Rates & Strata Fees – Ongoing property costs.
• Insurance Premiums – Landlord, building, and contents insurance.
• Depreciation – On building structure and assets (carpets, appliances).
• Utilities Paid by You – Water, electricity (if not reimbursed).
• Gardening – Lawn mowing, maintaining the gardens and tree lopping
• Borrowing Costs – Lenders mortgage insurance, applications fees and valuation fees
• Land Tax - Claim land tax paid on your investment properties
• Pest Control - Pest inspections, treatments, or ongoing pest management services

Important:

• Upgrades or improvements (e.g., new bathroom) must be depreciated, not claimed immediately.
• Expenses must be apportioned if the property was only rented part of the year or used personally.

Tax Depreciation: What Changed in 2017 and What You Can Still Claim

On 9 May 2017, the Federal Government announced changes that significantly impacted how depreciation could be claimed on plant and equipment in second-hand residential properties:

Key changes:

• If you purchased a second-hand residential investment property after 7:30pm on 9 May 2017, you can no longer claim depreciation on previously used plant and equipment (e.g. ovens, carpets, blinds).
• You can still claim capital works deductions (Division 43) on the building structure and permanently fixed items.
• You can still claim new plant and equipment (Division 40) that you install after the property becomes income-producing.
• Depreciation on disallowed plant & equipment is now added to your cost base for Capital Gains Tax (CGT) purposes.

Comparison Table: Depreciation by Property Type

Here’s a comprehensive blog-style breakdown on Tax Depreciation changes

Common Rental Property Mistakes to Avoid

• Claiming personal expenses as rental deductions.
• Deducting capital improvements as repairs.
• Forgetting to declare Airbnb or short-term rental income.
• Not adjusting for shared ownership or part-year rental.
• Redraws – using your rental home loan as a personal line of credit and then claiming 100% of the interest expense on the higher debt. This one has the ATO’s full attention.

Rental Property Tax Information to Provide

• Rental Property Annual Summaries (provided by the Real Estate Agent).
• Rental Property Monthly Statements (provided by the Real Estate Agent).
• Mortgage Statements for Interest Expense & Borrowing Fees.
• Council Rates, Water Rates & Strata Levy notices
• Copies of Tax Invoices for all repairs & improvements & appliances bought in the current year.
• External Tax Depreciation Schedules from QS.
• Copy of your Last Tax Return showing Depreciation Balances carried forward.
• Settlement Statements from Conveyancers showing Capital & Rental expenses.
• Invoices showing any initial repairs or improvements undertaken prior to renting out your new property.
• Dates - First Owned, First signed with Agent, First Rented & Dates of any periods you lived in the property.

Our Process

• Review Your Records – Rental income, expenses, and review loan statements for redraws.
• Re-calculate Interest Expense - if we find Redraws we will recalculate interest expense on your home loan on a line by line basis.
• Identify Eligible Deductions – Maximise your refund legally.
• Prepare & Lodge – Accurate, ATO-compliant tax return.
• Ongoing Support – Advice for next year and PAYG Withholding Tax Variations to boost Cash Flow.
• CGT Planning – We start your CGT file in your first year as a client.

Need a PAYG Withholding Tax Variation Cash Flow Boost?

Rental property owners may be eligible to apply for a variation to reduce the amount of PAYG tax withheld from their salary or wages, particularly where properties are negatively geared and a rental property loss is expected.

• Purpose of Variation - A cashflow boost by reducing PAYG tax withheld from wages, equal to the expected tax refund.
• Eligibility Criteria - Must be up to date with tax return and BAS lodgements
• No Debits - No outstanding tax debts or prior debit assessments related to previous variations
• Requirements - Must provide accurate estimates of income and deductions
• Application Process - Lodge online via myGov (individuals) or Online Services for Tax Agents (agents)
• Processing Time - Applications are processed within 28 days (online)
• Timing - Applications can be lodged anytime during the financial year
• Too Late? - If lodged in May or June, the variation applies to the next financial year

Additional Considerations

• PAYG Withholding Tax Variations are especially useful during periods of rising interest rates or when holding multiple investment properties.
• To avoid a debit assessment, a detailed projection is required—often involving a full draft tax return for the coming year. This can be time-consuming but ensures accuracy and compliance.

Why Choose Us for Rental Property Tax Returns?

• ATO-compliant: We follow the latest ATO rental property guidelines.
• We ensure all rental income is declared (including Airbnb and short-term rentals).
• We maximise Refunds: Claim every deduction you’re entitled to.
• Cash Flow Boost - PAYG Withholding Tax Variations to increase your net pay.
• We setup your capital gains tax (CGT) file in your first year of being our client.
• We assist with capital gains tax (CGT) when selling your property.
• Time-Based, Value-Focused: You’re billed for the time and expertise you need – nothing more.
• Australia-Wide Service: Online or in-person support.