Taxable Items

As a general rule all monies, not of a capital nature, expended in producing assessable income are allowable deductions for taxation purposes. The following list constitutes a guide as to what can be claimed in an Income Tax Return against Rental Income in respect of properties owned as at June 1999.

Disclaimer: The information contained in the following advice is issued to the clients of Darren Jones Real Estate Pty Ltd for their use only. As taxation law is complex and minor variations in similar matters may alter deductibility of an expense, clients should seek their own independent tax advice before committing to such expenditure.

  1. Advertising: All advertising costs associated with obtaining tenants for the property are allowable.
  2. Agents Fees and Commission: All fees and monthly commission charges are fully deductible.
  3. Bank Fees and Charges: This includes account keeping fees that Banks and Building Societies charge on loan accounts.  
  4. Borrowing Expenses: The costs of procuring a mortgage are deductible over five years where the loan is 5 or more years.  If the loan is for a period less than five years, the costs are deductible over the period of the loan.
  5. Cleaning: The cost of cleaning a rental property between tenancies is deductible.  This even includes the cost of detergents.
  6. Depreciation: It is permissible to claim depreciation on furniture, fixtures, window fittings, floor coverings and other items such as stoves, hot water systems and numerous other items.  The rates of depreciation vary depending on the item.  Items costing less than $300 which would normally be considered capital and depreciable are deductible in full.
  7. Electricity: Costs to the owner between tenancies are deductible.
  8. Inspection Visits: An owner may claim the costs of traveling to the rental property if the specific purpose of the trip is to inspect the property or carry out or organise repairs.  Please note that owners in the country can claim the cost of a trip to Melbourne including accommodation but not if the main purpose if the trip is for holiday purposes.
  9. Insurance: Deductions are allowable for premiums paid in respect of property, contents, public liability and mortgage insurance policies.
  10. Interest on Loans: Interest on loans procured to either assist in acquisition of a rental property, additions to the property, to carry out major renovations and the purchase of chattels are all deductible against rental income.
  11. Lawn Mowing and Garden Maintenance: All expenses associated with these items, including trees lopping, are allowable.
  12. Legal Fees: Sundry legal fees associated with a rental property are allowable to the extent of $50.00.
    1. Legal fees associated with debt collection are allowable in full
    2. Lease preparation costs are allowable in full
    3. Discharge of mortgage fees are allowable in full
  13. Management Levies: Body Corporate Levies for home units, villas, etc are deductible except for levies utilized to carry out capital improvements, alterations or additions.
  14. Pest Control: Costs of this nature are also deductible
  15. Rates: Council and water rates together with land tax are allowable in full.  Please note that water consumption is also deductible (if not paid by the tenant)
  16. Repairs: Any repairs to the property are deductible.  When the work in question goes beyond repairs and amounts to improvements, then no deduction is allowable.
  17. Telephone, Stationery and Postage: These costs if directly related to the rental property, are deductible.
  18. Accountants and Tax Agents Fees: Fees in preparing tax returns.