Top 8 EOFY Tax Tips for Investment Property Owners

eofy property tax tips

The end of the financial year is when most Australian investment property owners turn their minds to maximizing their tax benefits. Compliance with the existing tax laws, of course, is also a concern. Proper planning and attention to detail can help you make maximum savings. Here are 8 essential tax tips to help you sail through EOFY smoothly and efficiently.

1. Review Rental Income and Expenses

First, carefully go through all rental income received during the financial year. Be sure to account for every amount, whether rent paid, bond refunded, or other property-related income. On your part, also pool all expenses that were incurred in either managing or maintaining the property. These may include property management fees, repairs and maintenance, insurance, and interest on loans.

2. Maximize Depreciation Deductions

Depreciation can be an effective way to minimize your taxable income. Ensure that you are claiming depreciation on the building if it was erected after 1985 and on fixtures and fittings. Preparing a depreciation schedule with a qualified quantity surveyor might be well worth your while as they will be able to identify and maximize all deductions available to you.

3. Prepay Expenses

Bring forward deductions by prepaying expenses that are due immediately before the end of the financial year. More specifically, this applies to insurance premiums, loan interest, and, where relevant, property management fees. The rationale behind this is that such prepaid costs will give rise to a deduction in the current financial year, thereby reducing taxable income.

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4. Claim Capital Works Deductions

In case of structural improvements or renovation to your property, you are entitled to capital works deductions. These deductions, most of the time, are spread over 40 years at the rate of 2.5% per annum and are very useful in the long run, reducing tax. Keep detailed records of all the improvements so that you may be able to substantiate your claim.

5. Interest Deductions

Interest on money borrowed for buying, renovating or maintaining your investment property is normally deductible. You must also check and ensure that you apportioned correctly the interest expenses which relate to any mixed-use loan. By keeping proper records of your interest and claiming appropriate interest deductions, you will be able to make a big difference in your tax liability.

6. Keep Informed on Tax Changes

Updates to tax laws and regulations may have a bearing on how one runs their investment property. Keep yourself up-to-date with the recent changes to the tax law to know the impact on your deductions and obligations. You can get the most updated advice from a property tax expert.

7. How to manage Capital Gains Tax (CGT)

If you sold an investment property in the same financial year, you will need to consider the CGT implications. Check that you have calculated any capital gain or loss, taking into account the cost base of the property and relevant selling costs relating to it. If you held the property for more than 12 months, you may be entitled to the 50% CGT discount.

8. Get all your documents together

Detailed and well-maintained records with regard to your tax claims are very important. It is advisable to retain all documents regarding the rental income and the related expenses. Maintaining good record-keeping not only makes the process of filing tax returns easy but will also help you solve the queries that the Australian Taxation Office may have very efficiently.


The end of the financial year is a vital time of the year when investment property owners should prepare their financial books and review their tax positions. Keeping proper records of income received and expenses incurred throughout the year, ensuring that claims for depreciation and interest deductions are made, and being up-to-date with ever-changing tax laws will ensure you are well-placed at the close of the financial year. Coupling these with professional advice can further develop your tax strategy, ensuring you are maximizing your property investment.

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