This article is general information only and does not constitute financial or tax advice. Consult a qualified tax professional for advice specific to your situation.
Key takeaways
- Your rental property tax return is due by 31 October if you lodge yourself through myTax, or typically 15 May the following year if you use a registered tax agent.
- You need rental income records, categorised expenses with receipts, loan interest statements, and a depreciation schedule before you start.
- Only the interest portion of your mortgage is deductible. Claiming the full repayment is one of the most common mistakes the ATO flags.
- If your deductions exceed rental income, the net loss can be offset against your other income (such as your salary) through negative gearing.
- The tax agent fee is itself deductible in the following year, and a property-specialist accountant will often identify deductions you would have missed.
Tax time has a way of arriving before you feel ready for it. If you own a rental property, there is more to think through than a standard personal return: rental income to declare, a long list of deductible expenses to account for, and a separate schedule to complete. Getting it right is not complicated, but it does require knowing what to pull together and in what order.
This guide walks through the process from start to finish.
When to Lodge
The Australian tax year runs from 1 July to 30 June. Your tax return for the year ending 30 June is due by 31 October if you lodge yourself through myTax. If you use a registered tax agent, you typically get until 15 May of the following year, sometimes longer, depending on your agent.
For most landlords, filing late without a registered agent means a $313 failure-to-lodge penalty for each 28-day period the return is overdue. It is not worth the risk when the process is straightforward once your records are in order.
What Records You Need to Gather
Before you open myTax or sit down with your accountant, pull together the following:
Rental income. Every payment received from tenants during the financial year. If you use a property manager, their annual statement will summarise this for you. If you self-manage, you need a total from your bank records or rent tracking system.
Deductible expenses. Every cost you incurred in earning that rental income: loan interest, council rates, insurance, repairs, management fees, advertising, and any other eligible outgoings. Receipts and invoices for each one. For a full list of what qualifies, see our guide to rental property tax deductions in Australia.
Loan statements. Your lender should provide an annual statement showing the interest charged across the year. Remember: only the interest is deductible, not the principal repayment.
Depreciation schedule. If you are claiming depreciation on the building structure (Division 43) or plant and equipment items like appliances and carpet (Division 40), you will need a depreciation schedule. A quantity surveyor prepares this; it itemises each asset and the annual deduction you can claim.
Records of capital works. If you made improvements to the property during the year, keep the invoices. Capital works are depreciated over time rather than claimed immediately.
Estimate Your Depreciation
If you do not yet have a quantity surveyor's report, you can get a rough idea of what depreciation is worth on your property. Enter your property details below to see an estimate.
Enter asset cost, purchase date and effective life to see your depreciation schedule.
For a detailed breakdown of which expenses fall into which category, read our guide to landlord expenses you can claim. And to make sure you have everything ready before June 30, use our EOFY landlord checklist.
The Rental Property Schedule
When you lodge a tax return that includes rental property income, you complete a Rental Property schedule (also called a rental property supplementary schedule in myTax). You do this for each property you own.
The schedule asks you to report:
- The address and ownership percentage (relevant if you own the property jointly)
- Whether the property was rented for the full year, and if not, why
- Total rental income received
- Total expenses, broken down by type: interest, capital works, depreciation, agent fees, repairs, and so on
- Any carried-forward losses from previous years
The net result (income minus deductions) flows through to your personal tax return and is taxed at your marginal rate. If your deductions exceed your rental income, the resulting loss can generally be offset against your other income, which is what makes negatively geared properties attractive to many investors. For more on how this works, see our article on negative gearing explained. You can also use the negative gearing calculator to see how rental losses reduce your taxable income.
Using a Tax Agent vs. Lodging Yourself
If your situation is straightforward (one property, standard tenancy, no capital works or depreciation claims) lodging through myTax is manageable. The ATO's interface has improved considerably, and if you have your records in order, it is largely a matter of entering figures in the right boxes.
The case for using a registered tax agent strengthens when you have any of the following: multiple properties, depreciation claims, a property you sold during the year (which triggers capital gains tax considerations), a joint ownership structure, or a mixed-use property. The tax agent fee is itself deductible in the following year. If you did sell a property during the year, the capital gains tax calculator can help you estimate your liability before your meeting with the accountant.
A good accountant who specialises in property will also pick up deductions you might have missed, and their time is most valuable when you arrive with organised records rather than a pile of unsorted statements. If you can hand them a clean export showing income, categorised expenses, and receipts for the year, you will spend less time on the phone with them and less money on their bill.
Common Mistakes to Avoid
Claiming the full mortgage repayment. Only the interest portion is deductible. The principal comes off your loan balance and is not a tax deduction.
Treating capital improvements as repairs. Replacing a broken hot water system with a like-for-like unit is generally a capital item to be depreciated. Fixing a cracked tap washer is a repair. The line matters to the ATO. When you are unsure, ask your accountant before you lodge.
Missing deductions because the receipt is gone. The ATO requires records for five years from the date you lodge the return. For capital items, keep records from the date of purchase until at least five years after you sell the property.
Forgetting carried-forward losses. If your property made a net loss in a previous year and you could not offset it entirely against your income at the time, that loss carries forward. Your accountant will pick this up, but it is easy to miss if you are lodging yourself.
Not including all rental income. Rent received, bond amounts you retained, insurance payouts for lost rent. All of it is assessable income.
How propkt Helps at Tax Time
propkt tracks your rental income and expenses across the Australian financial year (July to June) as you go, so you are not trying to reconstruct twelve months of activity from memory in late October.
Every expense is categorised (interest, rates, insurance, repairs, and more) and you can attach receipts directly to each transaction. When tax time arrives, you can generate a tax summary report showing your income, your deductible expenses by category, and your depreciation deductions, all for the relevant financial year. You can export that as a CSV to hand to your accountant or use as the basis for your own lodgement.
The value is in the timing. A tax return filled out from organised records takes a fraction of the time of one reconstructed from bank statements and a shoebox of receipts. And organised records mean fewer deductions missed, which, over the life of an investment property, can add up to a meaningful amount.
If you want to be genuinely ready before 30 June rather than scrambling after it, give propkt a try, it is free for your first property.