Investment Properties & Tax

Benefits, costs and key considerations

If you’re considering investing in property, you must understand the tax consequences. In Australia, like many other parts of the world, owning an investment property offers potential tax benefits and costs. From claiming deductions on interest payments and holding costs to understanding the nuances of Capital Gains Tax (CGT), property investors need a comprehensive grasp on these matters to make the most out of their investments.

Property investment tax benefits

Interest payments and holding costs

Owning a rental property comes with its share of expenses. However, many of these costs can be claimed as tax deductions if your property is up for rent or already rented out.

For property owners, ongoing expenses that can be used as a tax deduction are:

- The interest accumulating on a mortgage used to purchase a rental property.

- Property Management fees

- Council Rates

- Water Rates

- Land taxes

- Insurance Coverage

- Repairs & Maintenance

- Other upkeep-related costs such as general cleaning or landscaping & gardening.

Claiming depreciation on rental assets

When you purchase items for your rental property, such as new appliances, they lose value over time due to wear and tear. You can claim this loss in value as a tax deduction, often referred to as tax depreciation or capital allowance, and spread across the useful lifespan of that item.

Claiming for construction and renovations

You can claim these expenses as deductions if you’ve undertaken construction or renovation projects at your rental property. Typically, these capital works deductions are spread out throughout 25 to 40 years. The exact time frame will depend on the construction’s start date, purchase date, and intended use.

Offsetting losses with negative gearing

When your rental property’s expenses exceed earnings, resulting in a net loss, this is termed “negative gearing.” The upside to negative gearing is that you might be able to leverage this loss to counterbalance income from other sources, ultimately lowering your taxable income for the year.

Four types of tax on investment property

Income tax

The income from your rental property is subject to tax, just like your regular income. When lodging your income tax return, you must include the rental income alongside any other earnings, such as your salary or profits from other investments.

Capital Gains Tax (CGT)

If you are thinking of selling your rental property, be prepared for the potential of Capital Gains Tax. If you make money when selling your rental property, that profit is seen as a “capital gain.” This profit needs to be reported on your yearly tax return. The extra tax you owe because of this added profit is called Capital Gains Tax or CGT, and is taxed at your marginal tax rate.

Stamp Duty Tax

When you buy an investment property, you must pay a stamp duty tax. This tax is due when the property’s ownership changes hands from the seller to the buyer.

The Australian Taxation Office (ATO) doesn’t let you claim this as a tax deduction on your income tax return, but it can be added to the asset’s cost base for CGT purposes.

Stamp duty varies depending on:

The state you’re in
The property’s price
If you’re a first-time buyer

Land Tax

Land tax is different from stamp duty. While you pay stamp duty just once when you buy a property, land tax is an ongoing charge based on the land’s value unless the property is your primary home (often referred to as Principal Place of Residence or PPOR).

Every state and territory has a land tax rate based on the land’s “unimproved value.” This means that the value of buildings, walkways, landscaping, or fences on the land is not included when calculating land tax.

Land tax rates and thresholds for each state or territory are available on the Revenue Office websites for each state. Please note the Victorian Land Tax Rates are included in the table below.

If you want to learn more about the tax implications of holding property, contact us today.

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Unlock The Benefits Of Downsizer Super

By Cogger Gurry • October 21, 2025

If you’re nearing retirement and looking for ways to boost your superannuation savings, downsizer super contributions might be the perfect solution for you. These allow eligible Australians aged 55 and over to contribute proceeds from selling their home into their superannuation fund. A downsizer contribution allows an eligible individual to contribute an amount equal to all or part of the sale proceeds (up to $300,000 each) from the sale of their home into their superannuation fund. The contribution must not exceed the sale proceeds of the home. The great advantage is that downsizer contributions aren’t restricted by any other contribution caps or your total superannuation balance; there are no work tests; and there’s no upper age limit. It’s one of the rare ways you can contribute large amounts to your super even after the age of 75. Eligibility To make a downsizer contribution, you must: • be 55 years or older at the time of contribution; • have owned the home for 10 years or more (the owner can be you or your spouse); • sell your home that is in Australia and is not a caravan, houseboat or mobile home; • ensure the sale is exempt or partially exempt from CGT for you under the main residence exemption; • make the contribution within 90 days of receiving the sale proceeds (usually settlement date); • not have made a downsizer contribution previously from another home; and • provide your super fund with the Downsizer contribution into super form either before or at the time of making the contribution. Failure to submit the Downsizer contribution into super form on time may result in your fund rejecting the contribution or treating it as a standard non-concessional contribution, which could have adverse tax implications. The 90-day deadline from the date of settlement is also strict. If you need more time (Eg due to delays in purchasing a new home), you must apply to the ATO for an extension. Extensions are granted only in limited circumstances, such as settlement delays due to council approvals. If you are considering selling your home and wish to further explore a potential downsizer contribution, please do not hesitate to get in contact with our office (03)55710111

Big Changes Coming To AML/CTF Laws- What Our Clients Need To Know

By Cogger Gurry • October 21, 2025

The government has announced major reforms to Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws . This is the biggest update in nearly 20 years. These reforms aim to modernise how Australia combats financial crime and bring us into line with international standards. While not every business will be affected, some sectors will face new or expanded reporting and compliance obligations. Sectors likely to be impacted include: Accountants and bookkeepers Real estate agents Lawyers and conveyancers Dealers in precious metals and stones The activities you undertake, such as managing client funds, setting up companies or trusts, or handling large transactions, will determine if these new rules apply to you. AUSTRAC’s national awareness campaign will help businesses understand what’s changing and how to prepare, with guidance and tools rolling out over the next year. 👉 We’re here to help. If you’re unsure whether these reforms could affect your business, contact our team to discuss what it means for you. You can read more here - https://www.austrac.gov.au/national-reforms-awareness-campaign-launch

Vouchers And GST In Your Business

By Cogger Gurry • October 21, 2025

Vouchers and GST in your business If your business sells or buys vouchers, it’s essential to understand how to account for and report GST correctly. A voucher is a document or an electronic record that represents a right to receive goods or services. This includes physical gift cards, digital vouchers and even prepaid phone cards. When your business sells a voucher, you’re essentially providing the recipient with a promise to supply goods or services in the future, and it’s at this future point that the GST implications come into play. The ATO recognises two distinct types of vouchers. Face value vouchers Face value vouchers can be redeemed for a reasonable choice of goods and services – for example, a $50 supermarket gift card that works across all store locations. The voucher sale isn’t considered a GST taxable supply, so you don’t charge GST at the point when you sell the voucher. Instead, you account for GST when the voucher’s redeemed and the goods or services are supplied. For instance, if you sell that $50 gift card, you don’t charge GST on the gift card sale, but when the gift card’s redeemed to purchase goods worth $50, you charge GST on the supply of those goods. Non-face value vouchers Non-face value vouchers are restricted to specific goods or services – like a voucher specifically for a spa treatment, purchased for $100. With these, you account for GST (eg on the $100 price) at the time of sale, but only if the voucher is redeemable for taxable supplies. If the voucher is only redeemable for GST-free or input-taxed supplies, there’s no GST to account for. Note on expired vouchers Here’s something business owners often overlook: if you’ve sold face value vouchers that expire or remain unredeemed, and you write back the unused amount to your current income for accounting purposes, you need to make an “increasing adjustment” on your Business Activity Statement (BAS). This adjustment is 1/11th of the unredeemed balance. Keep accurate records To account for GST on vouchers you sell, you need to keep accurate records including dates of sale, redemption and/or expiration, and the amounts of GST payable. Importantly, specific rules and exceptions apply to certain types of vouchers. For example, if you sell vouchers that can be redeemed for a combination of goods and services, you need to apportion the GST accordingly. You may also need to issue a tax invoice to the customer when a voucher’s redeemed and \keep a copy of this invoice for your records. And finally, of course, you need to report GST on vouchers in your BAS in accordance with ATO guidelines.