EOFY 2026: 8 Investment Property Deductions Australian Investors Miss

With June 30 around the corner, most Australian property investors are scrambling to gather receipts and bank statements. But after working with hundreds of investor clients across Sydney, we've noticed the same costly oversights show up year after year — items the ATO genuinely allows but investors leave on the table.

Here are the eight deductions to double-check before you hand your numbers to your accountant.

1. Depreciation on second-hand properties

If you bought your investment property after 9 May 2017, you can no longer claim depreciation on used plant and equipment (existing dishwashers, curtains, blinds). But you can still claim:

• Capital works deductions (Division 43) — 2.5% of construction cost over 40 years for buildings constructed after 15 September 1987
• Brand-new items you install yourself

If you don't have a depreciation schedule prepared by a quantity surveyor, you're almost certainly leaving thousands on the table each year. The schedule itself is tax-deductible.

2. Borrowing expenses (spread over 5 years)

Loan establishment fees, lender's mortgage insurance (LMI), title search fees, and mortgage broker fees are deductible — but not in year one. They must be amortised over the lesser of 5 years or the loan term.

A $4,500 LMI bill on a 30-year loan works out to $900 per year for five years. Investors regularly forget about years 2 through 5 because the bill was only paid once, in year 1.

3. Capital improvements vs. repairs

This trips up almost everyone. The line:

• Repairs (immediately deductible) — fixing what's broken to its original condition: patching the roof, replacing a few tiles, fixing a leaking tap.
• Improvements (capital, claimed over time) — replacing the entire roof, installing new bathrooms, adding decks.

If you replaced rather than repaired, it's an improvement — not a deduction this year. Get this wrong and you risk an ATO query.

4. PAYG withholding variation

Negatively geared? You don't have to wait until your tax return to get the cash flow benefit. A PAYG Withholding Variation application reduces your employer's tax withholding throughout the year — so the refund hits your weekly pay rather than as a lump sum next October.

This is especially valuable in a high interest rate environment when negative gearing losses have grown.

5. Travel expenses (mostly gone, but...)

The 2017 changes wiped out general travel deductions for inspecting your investment property. However, you can still claim:

• Travel where the property is held in a corporate or trust structure
• Travel undertaken by your property manager (already on your statements)
• Phone calls and admin costs related to the property

Don't claim driving to the property anymore — but do claim everything else.

6. Land tax

Often paid annually as a single lump sum and forgotten until tax time. Check your state revenue office statements. NSW, VIC, and QLD all have different thresholds and rates, and the bill is fully deductible against rental income.

7. Pre-payment of interest

If you have a fixed-rate loan that allows it, pre-paying up to 12 months of interest before June 30 brings forward the deduction into the current financial year. Useful if you've had an unusually high-income year and want to flatten your taxable income.

Talk to your accountant before doing this — it doesn't suit everyone, and the prepayment must qualify as an actual prepayment under ATO rules.

8. The initial repairs trap

This is a deduction many investors try to claim but shouldn't. Repairs done immediately after purchasing to fix existing damage (the broken oven the previous owner left, repainting the tired interior before tenants move in) are capital expenses, not deductions.

The ATO is increasingly active in challenging these. If you've claimed initial repairs, expect questions.

Why structure matters more than line items

Tax law is full of intersections like these. The tradeoff between PAYG variations, negative gearing, depreciation timing, and capital improvements all flows through to your borrowing capacity for the next investment.

That's why we structure investor clients around joint advice from our TaxWin (tax), APIG (property), and CPL Finance (lending) teams — so a tax decision doesn't accidentally torch your serviceability for the next purchase.

If you'd like a free 30-minute review of your property structure before EOFY, book a consultation. We'll look at your last return, your current loan structure, and flag what you're likely missing.

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The information in this article is general in nature and does not constitute personal tax advice. Speak to a registered tax agent before acting on any of these strategies.