Organise expenses by their treatment
Property expenses are not all claimed in the same way. Your accountant needs to distinguish eligible running expenses, borrowing expenses, depreciating assets, capital works and costs relevant to a later CGT calculation. Private use and ownership shares can affect the treatment.
Records worth collecting
| Category | Useful records |
|---|---|
| Rent and running expenses | Agent statements, invoices, rates notices and rental availability records. |
| Loan expenses | Interest statements and evidence of how borrowed funds were used. |
| Repairs and improvements | Invoices, dates, photographs and descriptions of the work. |
| Construction and assets | Cost records, asset purchases and any existing depreciation schedule. |
| Purchase and sale | Contracts, settlement statements and transaction expenses. |
Do not treat every repair as an immediate deduction
Work that restores damage, remedies a defect present at purchase or improves the property can receive different treatment. Give your accountant the actual work details rather than classifying everything under a single maintenance label.
Where a depreciation schedule fits
A depreciation schedule helps organise assessed construction and asset information. It does not establish eligibility for every listed amount. Restrictions on previously used residential assets and the treatment of capital works need to be applied to the actual facts.
Keep market value separate from construction cost
A CGT valuation may be needed for a relevant tax event. It assesses market value at an instructed date, rather than calculating the property's depreciable construction expenditure.
Frequently asked questions
Is a deduction the same as a refund?
No. A deduction affects taxable income, while the eventual tax result depends on the full return and applicable rules.
Can an older building still have relevant costs?
Possibly. Construction and improvement history need assessment; age alone is insufficient.
What about expenses already claimed?
Give your accountant earlier returns and schedules to avoid duplicate claims and identify any correction needed.
Sources and further reading
- ATO: Work out your capital works deductions — Eligible construction expenditure and applicable deduction rules.
- ATO: Second-hand depreciating assets — Restrictions relevant to previously used residential rental assets.
Arrange the right report
Explore tax depreciation with Propti. Send the property address, purpose, required date and recipient’s instructions when you request a property report quote.