Who This Guide Is For
If you own one or more investment properties in Australia — whether a single rental apartment or a multi-property portfolio — this EOFY guide is for you. The weeks leading up to 30 June are critical for property investors. From ordering a tax depreciation schedule to timing repairs and reviewing your loan structure, every decision you make now directly affects your FY2025–26 tax outcome. This guide covers every EOFY action property investors should take, including often-overlooked deductions that could save thousands.
Key EOFY Dates for Property Investors
| Date | Action Required |
|---|---|
| 30 June 2026 | Last day to incur deductible property expenses for FY2025–26. Repairs must be completed, depreciation schedule must be ordered, and prepaid expenses must be paid |
| 30 June 2026 | Final day to obtain a Quantity Surveyor's tax depreciation schedule for properties settled this year — the schedule can be prepared after 30 June, but the *order* must be placed before EOFY |
| 31 October 2026 | Self-lodged tax return deadline. If using a tax agent, extended deadlines apply (typically to 15 May 2027) |
| Various | Quarterly PAYG instalment notices from ATO (ATO guidelines) — review whether you should vary your instalments based on expected rental income |
ATO guidelines: The ATO has flagged rental property deductions as a key compliance focus area. In FY2024–25, the ATO found errors in 9 out of 10 rental property returns reviewed. Ensure every deduction is supported by records.
1. Tax Depreciation Schedule — The Most Overlooked Deduction
A tax depreciation schedule (prepared by a qualified Quantity Surveyor) identifies every depreciable asset in your investment property — from the building structure itself to carpets, blinds, appliances, and air conditioning units. For a typical Australian investment property, this can generate $5,000–$15,000 in annual deductions.
Two types of depreciation
- Division 40 (Plant & Equipment): Removable assets — carpets, blinds, dishwashers, ovens, air conditioners, ceiling fans, hot water systems
- Division 43 (Capital Works): The building structure itself — walls, roof, foundations, fixed plumbing, electrical wiring. Generally 2.5% per year for 40 years for properties built after 15 September 1987
Calculation example
You own a 5-year-old apartment in Melbourne purchased for $580,000. A Quantity Surveyor's schedule identifies:
```
Division 40 (Plant & Equipment): $4,200/year
Division 43 (Capital Works 2.5%): $8,700/year
Total annual depreciation: $12,900
```
If your marginal tax rate is 37% (+ 2% Medicare Levy = 39%):
`Tax saving from depreciation: $12,900 × 39% = $5,031`
With a typical schedule costing $440–$770, the fee is deductible and pays for itself many times over.
Critical rule — second-hand properties: For residential investment properties purchased after 9 May 2017, you cannot claim depreciation on *previously used* plant and equipment assets (Division 40). However, Division 43 (capital works) is still available. Brand-new properties and assets you install new yourself are fully depreciable under both divisions.
2. Repairs vs Improvements — Timing Matters
The difference between a repair (immediately deductible) and an improvement (depreciated over time) is one of the most misunderstood areas of property tax — and one of the most valuable EOFY strategies.
Repairs (immediate deduction)
- Fixing a leaking tap
- Replacing broken roof tiles
- Repainting walls to their original condition
- Repairing a damaged fence section
Improvements (depreciated over time)
- Adding a new deck
- Installing a split-system air conditioner where none existed before
- Replacing a kitchen benchtop with a higher-quality material
- Adding a bedroom or bathroom
The EOFY strategy
If you've been planning to repair something — paint a room, fix a broken appliance, patch a roof leak — complete it before 30 June. The cost is fully deductible this year. If you delay until July, the deduction shifts to FY2026–27, and you wait a full extra year for the tax benefit.
3. Loan Interest and Borrowing Costs
For most property investors, mortgage interest is the single largest deduction. Review these items before EOFY:
- Investment loan interest: Fully deductible, including interest on any loan drawdowns used for the property (e.g., renovations, repairs)
- Loan fees: Annual package fees, offset account fees, and redraw fees are deductible
- Borrowing costs over 5 years: Loan establishment fees, mortgage stamp duty (if applicable), title search fees, and valuation fees are deducted over 5 years or the loan term (whichever is shorter)
Calculation example
You have a $480,000 investment loan at 6.2% interest:
`Annual interest: $480,000 × 6.2% = $29,760`
Plus $395 annual package fee:
`Total loan deductions: $29,760 + $395 = $30,155`
If your rental income is $26,000, you're negatively geared by $4,155 — which offsets your other taxable income.
4. Prepaid Expenses — Insurance, Rates, Body Corporate
Property investors can prepay certain expenses before 30 June and claim the deduction this year:
| Expense | Prepayment Window | Deductible in FY2025–26? |
|---|---|---|
| Landlord insurance | 12 months forward | ✅ Yes |
| Council rates | Must be paid, not just invoiced | ✅ If paid by 30 June |
| Body corporate fees | 12 months forward | ✅ Yes |
| Water rates (if you pay them) | Must be paid | ✅ If paid by 30 June |
| Property management fees | Must relate to period ending by 30 June 2027 | ✅ Yes — 12-month rule applies |
5. Travel, Advertising, and Sundry Deductions
Property investors often miss these smaller but legitimate deductions:
- Advertising for tenants: Listing fees on realestate.com.au, Domain, and agency marketing costs
- Property management fees: Ongoing management fees, lease renewal fees, tribunal representation
- Travel to inspect the property: If you travel to inspect, maintain, or collect rent — though note that from 1 July 2017, travel *solely* for inspecting residential investment properties is no longer deductible. Travel for repairs or maintenance you perform yourself may still qualify
- Legal fees: Lease preparation, eviction proceedings, and debt recovery for unpaid rent (but not purchase/sale conveyancing — those are capital costs)
- Phone calls and stationary: Directly related to managing the property
- Bank charges: Account fees on the dedicated loan or transaction account for the property
Common Mistakes Property Investors Make
| Mistake | Why It's Wrong | What to Do Instead |
|---|---|---|
| Not ordering a depreciation schedule | Missing $5,000–$15,000/year in legitimate deductions | Engage a Quantity Surveyor; most can provide an estimate before you commit |
| Claiming initial repairs as immediate deductions | If the property had damage when purchased, fixing it is a capital improvement, not a repair | Get a pre-purchase building report; initial repairs are amortised over time |
| Mixing personal and investment loan accounts | Contaminated loan purpose can make interest apportionment impossible | Use separate loan splits or accounts for investment vs personal |
| Claiming travel to inspect the property | Since 1 July 2017, travel solely to inspect residential investment property is not deductible | Only claim travel for performing repairs or maintenance yourself |
| Forgetting to split body corporate sinking vs admin fund | Sinking fund contributions for capital works are not immediately deductible | Admin fund contributions (day-to-day maintenance) are deductible this year; sinking fund contributions are capitalised |
| Missing the 30 June deadline for prepaying insurance | Insurance paid on 1 July counts toward next financial year | Set calendar reminder to pay landlord insurance by 28 June |
Records to Keep
- Loan statements showing interest charged (all investment loan accounts)
- Depreciation schedule (valid for the life of the property — update after renovations)
- Receipts for all repairs and maintenance (with dates, descriptions, and supplier details)
- Insurance policy documents and payment receipts
- Council and water rate notices (showing payment dates)
- Body corporate levy notices (split by admin fund and sinking fund)
- Property management statements (monthly or quarterly)
- Lease agreements and renewal documents
- Bank statements for the dedicated property account
- Quantity Surveyor's invoice for depreciation schedule preparation
Quick Checklist
- Order a tax depreciation schedule from a Quantity Surveyor before 30 June (if not already done)
- Complete all planned repairs before 30 June (not improvements — repairs only)
- Pay landlord insurance for the next 12 months before EOFY
- Pay council rates and water rates (if you're responsible for them) by 30 June
- Pay body corporate fees covering the next 12 months
- Review investment loan statements and calculate deductible interest
- Gather all property management statements for the full financial year
- Identify any capital works deductions (Division 43) for structural improvements
- Document the difference between repairs and improvements clearly
- Review whether negative gearing applies — and update your PAYG withholding variation if needed
- Separate personal and investment property expenses in your records
Managing multiple properties, trusts, or complex negative gearing scenarios? a registered tax agent (see the directory) Still unsure whether you need professional help? See our decision guide for property investors.
*Disclaimer: This is general information only. Property tax rules are complex and frequently updated. Consult a registered tax agent for advice specific to your investment property portfolio.*