Are You Missing Out On $5,000 Worth Of Investment Property Negative Gearing Deductions?

We have many own­ers ask us about what invest­ment prop­erty neg­at­ive gear­ing deduc­tions they can claim.

investment property negative gearing deductions

Well The Aus­tralian Tax Office (ATO) has cla­ri­fied neg­at­ive gear­ing for rental prop­er­ties as tens of thou­sands of Aus­tralian prop­erty investors sub­mit their annual tax returns.

Accord­ing to the ATO, when investors com­plete their tax return for the rel­ev­ant year, they may be able to claim a deduc­tion for their rental prop­erty expenses against their com­bined rental and other income (such as salary, wages or busi­ness income). If the other income is not suf­fi­cient to absorb the loss, they can carry the loss for­ward to the next year.

Investors can claim some of the rental prop­erty expenses (such as insur­ance) the year they incur them, oth­ers can be claimed pro­gress­ively over a num­ber of years.

What Expenses Can be Claimed Immediately?

Expenses that can gen­er­ally be claimed the year they are incurred include:

  • Interest on the load used to pur­chase the property;
  • Repair costs, for example, repair­ing the gut­ter­ing or win­dows dam­aged in a storm.

What Expenses Can be Claimed Progressively?

Expenses that are deduct­ible over a num­ber of years include;

  • Most of the bor­row­ing costs;
  • The cost of depre­ci­at­ing assets and struc­tural improvements.

Rental prop­erty own­ers can claim a tax deduc­tion for the cost of fees (such as reg­u­lar man­age­ment fees or com­mis­sions) they pay to a prop­erty man­ager or real estate agent. The best evid­ence to sup­port their claims are state­ments from their prop­erty man­ager or agent.

What Can Investors Not Claim?

When it comes to prop­erty man­age­ment fees or com­mis­sion, investors can­not claim an imme­di­ate tax deduc­tion for:

  • Com­mis­sions or other costs paid to a prop­erty man­ager or other per­son for the sale or dis­posal of a rental property;
  • Buyer’s agent fees paid to any entity or per­son engaged to find a suit­able rental prop­erty to purchase.

Investors can use these costs to reduce the cap­ital gain they might make when they even­tu­ally sell the rental property.

For more inform­a­tion about rental prop­erty expenses and deduc­tions go to  the ATO’s web­site

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Jhai is an award win­ning Inter­net Mar­ket­ing Real Estate Agent for Eld­ers Toongab­bie and Kings Langley. After run­ning his own inter­net mar­ket­ing busi­ness he has now set his own sites for the real estate industry. He observed that 90% of real estate agents did not know how to mar­ket them­selves online. Jhai is now fixed on one goal. To teach real estate agents that they can mar­ket online so much bet­ter than they cur­rently are.

Since then he has been con­sist­ently quoted in the Sydney Morn­ing Her­ald and Real Estate Busi­ness online. He is a reg­u­lar guest blog­ger on, shar­ing his expert­ise of mar­ket­ing aspects for the Real Estate Industry. His biggest pas­sions are his wife, mar­tial arts, dogs and most of all property.

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