Tax deductions for landlords

27 June 2018

As the end of the financial year approaches comparison site, has released research into how landlords can minimise personal income tax through deductions.

According to data from the ATO analysed by finder, rental income has jumped 4.8% year on year from $39.7 billion in 2015 to $41.5 billion in 2016. Deductions, however, are still around $3.6 billion greater than rental income, with 60% of rental properties in Australia being negatively geared, providing benefits to property investors. money expert Bessie Hassan says that billions of dollars worth of tax can be saved by landlords through negative gearing.

“Expenses like travel for landlords, gardening and lawn mowing can all be claimed by property investors. There are tax advantages of being negatively geared, and savvy investors are deducting thousands for cleaning, repairs, maintenance and even stationary.”

Bessie says recent research into pivot loans, also known as ‘loan reducer’ home loans suggests property investors are paying interest of as low as 1.90% on their personal owner occupier home loans by bundling with their investment property.

“The perks for property investors in this country don’t stop at negative gearing, now landlords can even use their personal home loan to save on tax.”

Finder also asked in a recent survey how Aussies are planning to spend their tax return and found 7% plan to use it to make extra repayments on their home loan. 

Bessie says slashing debt with a tax refund is one of the smartest ways to spend it.

“While using the refund to start an emergency fund could safeguard you against unforeseen costs in the coming financial year, the interest you pay on outstanding debt on a credit card will outweigh any interest you will earn by parking the refund in a high interest savings account.

“If however you use your refund to make extra mortgage repayments, it could have a sizeable impact on the length of your loan and if you make it an annual habit you could potentially own your home outright sooner.”

You can read more about how to maximise your tax return as an investor here


As the editor of BUILD I have a keen interest in sustainable housing and new technologies.