Property Investing Advice and Market Insights.

Introduction In 2026, the ATO is no longer relying on what you report. It is actively checking it. With expanded data matching across rental bond authorities, property managers, and short term platforms like Airbnb and Stayz, property investors are under closer scrutiny than ever. Many investors are not audited because they intentionally do the wrong thing, but because they misunderstand what needs to be declared and what can actually be claimed. The rules have also become more complex. Draft guidance such as TR 2025/D1 signals how the ATO is tightening its position on private use, holiday homes, and lifestyle properties. At the same time, common mistakes around loan interest, repairs, and depreciation continue to trigger adjustments and penalties. This guide breaks down the key areas of your rental property tax return based on the ATO’s Rental Property Statement. It will help you understand what must be declared as income, what you can legitimately claim as deductions, and where investors most commonly get it wrong. I. What You Must Declare (Assessable Income) One of the most common mistakes investors make is declaring only the net rent they receive. The ATO requires you to declare gross income before any fees or deductions. Gross RentYou must include every dollar paid by a tenant or guest. This includes weekly rent, short term accommodation income, and any cleaning or service fees charged through platforms like Airbnb or Stayz.Example: If your agent deducts $3,000 in fees and sends you $27,000, you must still declare $30,000. Bond Money RetainedIf you keep part or all of a tenant’s bond to cover unpaid rent or damage, that amount is treated as income. Insurance PayoutsIf you receive insurance for loss of rent, it must be declared as income. Payments for property damage are treated differently and may fall under capital gains rules. ReimbursementsIf a tenant reimburses you for a cost you have already claimed as a deduction, such as a repair or water bill, that reimbursement must be declared as income. Discounted Rent to Family or FriendsYou must still declare the income received. If the rent is below market value, your deductions may be limited to the amount of income earned. II. Expense Details: Maximising Your Deductions The Green Zone (Immediate Deductions) These are expenses you can generally claim in full in the same financial year. Advertising and CommissionsYou can claim agent fees, platform commissions, and listing costs.You cannot claim the value of your own time managing the property. RepairsRepairs relate to fixing something that is broken or damaged.Examples include repairing a leaking tap, replacing a broken window, or fixing storm damage. What you cannot claim here are initial repairs. If the damage existed when you purchased the property, the cost is considered capital in nature. A simple rule: if the work improves or replaces the whole asset rather than fixing damage, it is likely capital. Operational CostsCleaning, gardening, and pest control costs are deductible when incurred during rental periods. The Amber Zone (Holding Costs and Apportionment) These expenses are often deductible, but may need to be apportioned. Interest on LoansYou can claim interest on the portion of the loan used for the investment property.You cannot claim interest on funds used for personal purposes such as holidays, cars, or private expenses. Example: If you redraw from your mortgage for personal use, you must separate and exclude that portion of interest. Rates and TaxesCouncil rates, water rates, and land tax are generally deductible.You cannot claim water usage charges that are paid directly by the tenant. InsuranceLandlord, building, and contents insurance are deductible.Personal insurance such as life, trauma, or income protection is not. Apportionment RulesIf the property is used privately or is not genuinely available for rent, expenses must be apportioned.This includes: Private stays by the owner Periods where the property is not actively listed for rent Renting below market value III. Claiming Over Time Not all expenses can be claimed immediately. Some must be claimed over several years. Building Write Off (Capital Works)Most residential properties allow a deduction of 2.5 percent per year over 40 years.Eligible build to rent developments may qualify for an accelerated 4 percent rate. Depreciation (Plant and Equipment)Assets such as appliances, carpets, blinds, air conditioning units, and hot water systems are depreciated over their effective life.This is a key area many investors miss or underclaim. RenovationsMajor upgrades such as new kitchens, bathrooms, or extensions are capital works and must be depreciated over time.They should not be claimed as repairs. Instant Asset Write OffThis may apply only if you are genuinely carrying on a rental property business, which is uncommon and depends on your circumstances.Most individual investors will not qualify and will instead claim depreciation over time. IV. The Absolute No List (Common Audit Triggers) Travel ExpensesTravel costs related to inspecting or maintaining a residential rental property are not deductible. This includes flights, fuel, and accommodation. Borrowing Costs Over $100Expenses such as loan establishment fees and lender’s mortgage insurance must be spread over five years. The Leisure Facility Risk (TR 2025/D1)If you use a holiday home privately during peak periods such as Christmas or Easter, the ATO may classify it as a lifestyle asset. The consequence can be severe. The ATO may deny key deductions such as interest, rates, and land tax for the entire year. Keeping accurate records of private use is essential. Investor Action Checklist for 2026 Declare gross income, not net amounts received Review loan redraws and separate personal use Ensure ownership percentages match your tax return Keep a clear record of any private use Confirm your depreciation schedule is up to date Final Word Property investment offers strong tax advantages, but only when structured and reported correctly. Most costly mistakes are not aggressive claims, but simple misunderstandings that compound over time. Getting it right can mean the difference between maximising your return and triggering an ATO review. Need Help Getting This Right? If you are not completely confident your property is structured correctly or you are claiming everything you are entitled to, it

EOFY 2026. Property investors tax deduction guide

EOFY 2026.

EOFY 2026

Melbourne Housing: Why the “Buyer’s Friend” is 2026’s Best Kept Secret If you’ve been on the fence about the Melbourne property market, the latest Cotality Monthly Housing Chart Pack (April 2026) has a clear message: the window of opportunity you’ve been waiting for is officially open. While other capital cities are hitting record-breaking highs, Melbourne is moving to a different beat—one that favors the prepared buyer. Here is why the latest data suggests that “waiting for a better time” might actually be your biggest risk. 1. The “Buyer’s Friend” Advantage While the national market grew by 2.1% last quarter, Melbourne was the only major capital to see a meaningful cooling, with values dipping -0.6%. In a country where Perth and Brisbane are soaring at double-digit annual growth, Melbourne’s relative “cool” is a rare gift for buyers. Below the Peak: Melbourne values are currently -1.3% below the record high seen in March 2022. Negotiating Room: With quarterly values softening, the frantic “fear of missing out” has been replaced by a market where buyers have more leverage at the negotiating table. 2. The “Move-Up” Window is Open The Cotality report highlights a significant “stratified” trend in Melbourne. The “cooling” isn’t happening equally across the board, which creates a unique strategy for those looking to upgrade: The Premium Dip: The most expensive 25% of Melbourne homes saw the sharpest decline, dropping -1.6% in value this quarter. Middle-Market Stability: The middle 50% of the market remained completely flat at 0.0%. The Strategy: If you own a mid-tier home and want to upgrade to a premium property, the “price gap” between the two has narrowed. Your current home is holding its value while your “dream” home just got a little more accessible. 3. The Hidden Cost of Staying on the Fence Many people stay on the fence to “save more,” but the Cotality data shows that the rental market is making that a losing game. Rents are Accelerating: Melbourne rents rose 4.4% over the past year. No Place to Hide: The vacancy rate is a razor-thin 1.6%, meaning competition for rentals is often as fierce as the buying market. The Math: With rental yields sitting at 3.7%, every month you wait is a month you are paying down a landlord’s equity rather than your own. 4. Why Melbourne is Different: The Supply Factor The “Chart of the Month” in the Cotality report explains why Melbourne hasn’t exploded like Perth or Brisbane. Historically, Victoria has built more housing relative to its population growth than any other state, accounting for roughly one-third of all national completions. This healthy supply-demand balance is exactly what makes Melbourne a “Buyer’s Friend”—you have more choices and less of the frantic supply-starved competition seen elsewhere. The Verdict: Strategic Timing Yes, the RBA lifted the cash rate to 4.1% in March. Yes, borrowing capacity is tighter. But the April 2026 Cotality report makes one thing clear: Melbourne is the only major market offering buyers a genuine “breather”. History shows these cooling phases don’t last forever. Once the trend turns positive again, the window of opportunity becomes much smaller—and often more expensive. What This Means for You The opportunity is there—but the real question is: what does this actually look like for you? Everyone’s situation is different. Your income, savings, borrowing power, and goals all play a part in what you can realistically do right now. And this is where most people get stuck. They understand the market is shifting, but they’re not quite sure what their next step should be. Not sure if you can actually buy yet? Let’s find out. Have a quick, no-pressure chat with us and we’ll walk you through: What you could realistically afford What options are available to you right now What your next step could look like So instead of guessing, you’ll have a clear idea of where you stand after speaking with our team. [Check Your Buying Position]