How to Reduce Your Property Investment Taxes in 2025

The must-read guide for smart Aussie investors this tax season

Tax time isn’t exciting. But if you’re a property investor in Australia, it’s one of the most important times of the year.

Why? Because the Australian Taxation Office (ATO) is paying close attention to rental property owners in 2025. That means less room for error—but also more opportunity to reduce your tax legally, if you know what to claim.

In this guide, we’ll walk you through:

• What you can claim as a property investor
• How depreciation works (and why most people miss it)
• The benefits of salary sacrificing and CGT planning
• How working from home can help reduce your overall tax

Let’s get started.

What Can You Claim as a Property Investor?

Many investors overpay on tax simply because they don’t know what’s claimable. Here are some of the most common (and often overlooked) deductions you can include in your return:

1. Property Agent and Leasing Fees

When you hire a property manager, all the fees you pay them can be claimed:

• Property management fees
• Advertising costs to find a tenant
• Lease preparation fees
• Costs of brochures and signage

These are all considered necessary to maintain and manage your investment property. If you paid an agent to help you rent out your home—claim it.

2. Strata Fees

Own a unit or townhouse? You’re likely paying strata levies. These cover things like building maintenance, shared services, and insurance for common areas. Good news—these fees are deductible.

If your property is Torrens-titled (like most standalone homes), you probably don’t have these costs. But for strata-titled properties, always include them in your return.

3. Loan Interest (Not Principal)

If you’re paying off a mortgage, you can’t claim the principal part of your loan. But the interest? Absolutely.

Let’s say your annual loan repayments total $25,000—but $15,000 is interest. That $15,000 is fully claimable as a tax deduction.

This makes interest-only loans a more common strategy among some investors, especially early in the journey.

4. Council and Water Rates

Your investment property will likely attract two types of rates:

• Council rates
• Water rates

Both are deductible. One handy hack is to let your property manager pay these bills directly from the rental income. It’s cleaner, faster, and ensures you never miss a bill or lose paperwork.

Even better, it reduces admin time—especially if you own multiple properties.

5. Insurance

Every investment property should be insured. This includes:

• Building insurance
• Landlord insurance
• Rent default or contents cover (if applicable)

These expenses are claimable, and they help reduce your taxable income for the year.

6. Repairs and Maintenance

If you fixed a leaking tap, repainted a room, or replaced broken tiles—you can claim it.

However, there’s a difference between repairs and renovations:

• Repairs (restoring something that’s broken) are usually immediate deductions.
• Renovations (improving the property) may fall under capital works and get depreciated over time.

Always keep receipts, and talk to your accountant to know which is which.

Don’t Miss This: Depreciation Schedules

This is where many investors leave money on the table. If you haven’t heard of a quantity surveyor or a depreciation schedule, keep reading.

A quantity surveyor is a professional who calculates how much your building is depreciating each year. They prepare a depreciation schedule that tells the ATO what you can claim.

What can be depreciated?

• Building structure (for properties built after 1987)
• Fixtures and fittings (like carpets, blinds, air conditioners)

Why does this matter?

Let’s say your rental income is $10,000 a year. If the depreciation schedule says your property is losing $3,000 in value each year, then your taxable income drops to $7,000. That means you pay less tax.

Even though depreciation is just a “paper loss,” it saves you real money.

Tip: If your property is less than 40 years old, you should definitely get a depreciation schedule. It’s a one-time cost (usually $300–$700) but can save you thousands over time.

Other Legal Ways to Reduce Tax in 2025

Tax savings don’t stop with your property. Here are a few extra strategies to consider this year.

1. Salary Sacrifice into Super

If you have a job, you can reduce your pre-tax income by contributing to your super fund.

Example:
You earn $10,000 per month. If you salary sacrifice $1,000 into super, your taxable income becomes $9,000.

This strategy works best if:

• You’re in a higher tax bracket
• You want to grow your super long-term
• You’re not relying on every dollar of take-home pay

Over time, the compounding effect inside super is powerful—and tax-friendly.

2. Capital Gains Planning

If you’ve sold a property or plan to, be smart about when and how you sell.

• If you hold the asset for more than 12 months, you qualify for a 50% CGT discount.
• If you sell within 12 months, you pay tax on the full gain.

Example:
You flip a property and make $40,000 profit.
Sell it after 6 months? You pay tax on the full $40K.
Sell it after 12 months? You’re only taxed on $20K.

Also consider timing: Selling on or after 1 July pushes tax into the next financial year, giving you more time to prepare.

3. Working From Home Deductions

Post-pandemic, many Australians work from home—and that opens up more tax deductions.

If you use a dedicated home office, you can claim:

• A portion of your electricity bill
• Internet costs
• Computer or desk purchases
• Office supplies

ATO guidelines change regularly, so keep a logbook or use a flat rate method if you’re unsure.

What the ATO is Watching in 2025

This year, the ATO is focusing on:

• Rental income under-reporting
• Over-claiming on deductions (especially travel, repairs, and interest)
• Claims for vacant land or non-income-generating properties

If your property isn’t earning rent yet, you may not be able to claim some expenses. Always check with a qualified accountant to stay on the safe side.

Final Thoughts

Tax time doesn’t need to be stressful.

In fact, if you know what to claim, have the right records, and work with a good accountant—you can save thousands.

Let’s recap:

✅ Agent, loan, council, strata, and repair costs are all deductible
✅ Get a depreciation schedule from a trusted quantity surveyor
✅ Look at salary sacrifice and CGT strategies
✅ If you work from home, claim those deductions too

Bonus: Track It All in One Place

Want to make tax time easier next year? Use a property investment tool that tracks everything from loan repayments to depreciation schedules.

Download the Property Dollar app — it’s built for property investors like you, helping you:

• Track property expenses in real-time
• Store receipts and invoices
• Calculate estimated depreciation
• Get alerts for tax-saving opportunities

👉 Click here to download for free

Disclaimer: This content is for general informational purposes only and does not constitute financial, tax, or legal advice. Please consult a licensed financial adviser or tax professional for advice tailored to your individual circumstances.