Tax & Deductions
Claim everything you are entitled to. Guides to deductions, depreciation, capital gains, and record keeping for Australian rental properties.
Sydney house rents added $50 in a quarter to a record $850. Darwin vacancy hit 0.1%
Domain's June Quarter 2026 Rent Report, released 8 July, put Sydney house rents up $50 in three months to a record $850 a week, the sharpest quarterly lift since 2022. Darwin's vacancy rate collapsed to 0.1%. Melbourne, Adelaide, Perth and Hobart barely moved. Domain's chief economist reads landlord behaviour as pricing in the 1 July 2027 negative gearing reset. Here is the city-by-city split and what it does to a leveraged investor's yield calculation.
From 10 August SMSFs can't borrow to buy residential property. Contracts signed by 9 August count
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received Royal Assent on 26 June 2026. From 10 August 2026, self managed super funds are banned from entering new limited recourse borrowing arrangements to acquire residential property. Existing LRBAs are grandfathered, business real property is preserved, and refinancing is still available if the principal balance does not increase. SMSFs already hold about $178 billion in property. Here is what the 45 day contract window means for a trustee planning to add a residential rental to the fund and how the ban reshapes SMSF property strategy from FY2026-27 onward.
Westpac now sees a 2% national price fall this year and a 20% turnover slump as buyer sentiment cracks
The Westpac-Melbourne Institute Index of House Price Expectations dropped 14.9% to 128.2 in June 2026, below its long-run average for the first time in nearly three years. In the same round of forecasts, Westpac's June Housing Pulse pencilled in a 2% national price fall for 2026 and a 20% collapse in market turnover as the Federal Budget's negative gearing and CGT reset scheduled for 1 July 2027 pulls investors out of established stock. Grandfathered investors have a 12-month positioning window. Here is what the sentiment turn and the forecast revision mean for a landlord's refinance, rent review and hold-sell calendar into the second half of 2026.
Sydney lost 3.2% over the June quarter. Rents still grew 5.9%
Cotality's June 2026 Home Value Index has the national index down 0.4% for the month, the biggest single-month fall since December 2022. Sydney lost 1.2% in June and 3.2% for the quarter, Melbourne 1.0% and 2.6%. ABS Building Approvals for May 2026, released the same week, put apartment approvals down 10.4% while data centres pushed non-residential building to a record $10.83 billion. Rents still grew 5.9%. Here is what the June turn does to a leveraged landlord's yield, refinance window and buying calendar into the second half of 2026.
Sydney fell 1.2%, Melbourne 1.0% in June. Cotality's national index dropped 0.4%, the sharpest fall since December 2022
Cotality's June 2026 Home Value Index landed on 1 July with the sharpest monthly drop the national index has recorded since December 2022. Sydney is down 3.2% for the June quarter and Melbourne 2.6%, with combined capitals off 1.3% over the same three months. National rent growth is running at 5.9% and yields have edged up to 3.45%. Here is what the deepening downturn means for a leveraged Sydney or Melbourne landlord starting FY2026-27 on the back foot.
Division 296 starts 1 July. SMSFs holding $177 billion in property have one shot at today's market value
From 1 July 2026, Division 296 adds 15% tax to the proportion of SMSF earnings tied to a member's total super balance above $3 million. The Better Targeted Super Concessions package received Royal Assent on 13 March 2026 with one important sweetener for SMSFs: a one-off election to reset the cost base of every CGT asset to its 30 June 2026 market value for Division 296 purposes only. With $60.9 billion of residential and $116.7 billion of commercial property sitting inside the SMSF system, today is the valuation date that has to be locked. Here is what the reset is worth, what the valuation rules demand, and where the trap is for an SMSF landlord with a single lumpy property.
ATO's 10.96% interest charge is no longer deductible. FY26 landlord returns are the first to wear it
The Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025 stripped tax deductibility from the ATO's General Interest Charge and Shortfall Interest Charge for any amount incurred from 1 July 2025. With GIC sitting at 10.96% for the April to June 2026 quarter and stepping up to 11.43% from 1 July 2026, the FY2025-26 lodgement is the first time a landlord with a tax shortfall wears the full rate. EOFY 30 June 2026 is Tuesday. Here is what landlords still have time to do, and where the ATO's 1.7 million-loan data-matching net is pointed for this tax time.
NSW Budget gives landlords a 0.5% land tax discount as the $1.075m threshold stays frozen for a third year
Treasurer Daniel Mookhey handed down the 2026-27 NSW Budget on Tuesday 23 June 2026 with three property-tax levers for landlords: a 0.5% land tax early-payment discount, a permanent build-to-rent land tax concession, and a waiver of the 9% foreign purchaser surcharge duty for BTR and retirement villages above 50 dwellings from 1 July 2026. The general land tax threshold stays frozen at $1,075,000 for a third straight year. Here is what the package actually saves a Sydney investor and what the frozen threshold quietly costs.
Selling before 30 June? Without an ATO clearance certificate the buyer must withhold 15% of the sale price
From 1 January 2025, the Treasury Laws Amendment (2024 Tax and Other Measures No. 1) Act removed the $750,000 threshold on Foreign Resident Capital Gains Withholding and lifted the rate from 12.5% to 15%. Every Australian property sale now needs an ATO clearance certificate at settlement or the buyer is legally required to withhold 15% of the sale price and remit it to the ATO. With EOFY one week away and most settlements stacked into June, here is what the certificate trap costs a landlord who leaves it late.
Investor share of new home loans hit a record 41%. APRA's 6x DTI cap is now the binding constraint, not the 4.35% cash rate
The investor share of new housing lending hit a record 41% in the March quarter 2026 on the latest ABS read, while APRA's 6x debt-to-income cap quietly activated on 1 February. The RBA held at 4.35% on 16 June. For a Sydney landlord planning a purchase before 30 June, the binding constraint is no longer the cash rate. It is the bank's portfolio share of high-DTI loans. Here is what the new ceiling does to a $1 million investor borrow.
ATO ruling TR 2025/D1 puts holiday-home interest, rates and land tax deductions at risk from 1 July
From 1 July 2026, the ATO's draft ruling TR 2025/D1 presumes a holiday home is a 'leisure facility' unless the owner proves sustained commercial use. The ruling replaces IT 2167 from 1985 and bites the largest deduction categories: interest, council rates, land tax and insurance. With EOFY 12 days away and nine in ten rental returns failing the ATO's random enquiry program, here is what the cut-off means for an Australian landlord's 2025-26 return and the year ahead.
Sydney fell 0.9% and Melbourne 0.8% in May. Perth is still up 20% on the year
Cotality's May 2026 Home Value Index has the national market flat at 0.0%, with Sydney down 0.9% and Melbourne down 0.8% as both cities log around six months of consecutive declines. Perth still sits up around 20% on the year and the capital city growth spread is now 24 percentage points. Here is what the cycle turn means for a leveraged landlord's equity, yields and refinance window into 1 July 2026.