July 2026
It takes planning to get the most back when you do your tax return.
Planning by you, not your accountant. The more organised you are when you go to see them, the better things will be for both of you.
We have a checklist that you may find useful to help you prepare: Property-Related-Tax-Deductions
If you have a new investment property, you’ll need a new Depreciation Schedule. You can make an enquiry here. We’ll have a chat with you about your new property and get this underway.
What else can you do?
This time next year when people start looking around for CGT Property Valuations in response to the recent changes to CGT, keeping good records of any changes you’ve made to your property will be important. We explain why here.
It’s important that you understand all the opportunities resulting from the changes in the May Budget. We’ll expand on that below.
Do you have an older property you have always thought won’t have any depreciation in it? Wouldn’t it be a pity if there was.
And wouldn’t it be a pity if nobody realised that some of that Special Levy you paid could be claimed as ‘repairs’.
Key Points
- 1. Keep good records for any improvements you’ve made during the year for your accountant and any future CGT Property Valuations.
- 2. Opportunities remain despite the changes to CGT and Negative Gearing. Losses from residential property can still be claimed against the profits on other properties – just not against non property income. Losses that can’t be claimed in one financial year can be stored up and used to reduce CGT when an affected property is sold.
- 3. A PAYG Withholding Variation is a simple way to improve your cash flow throughout the financial year. Talk to your accountant to see if this strategy could work for you.
- 4. Older properties often have plenty of depreciation in more recent renovations. If you’re not sure, get in touch and we’ll have a look online.
- 5. To claim a Special Levy as a repair means that the problem you are correcting must have been found while YOU were renting out your property. If you knew about the problem before you started renting out your property, it will be classed as an improvement and you’ll need to add it to your Depreciation Schedule.
Keep good records of changes to existing properties
Keep good records of changes and improvements made to your investment properties to help reduce your taxable income. It’s messy and inefficient to show up to your accountant’s office with a shoebox full of receipts.
Any genuine repairs, your accountant can claim as an immediate deduction. Improvements to your investment property may need to be recorded and depreciated over time. We’ve written about repairs and improvements before – you can read more on this here.
But there is now another reason why it is important to capture all the changes you make to your investment property. You heard about those changes to CGT announced in the May Budget? How could you not. You can read more on this here.
In short, around July 1 next year when everyone is trying to get CGT Property Valuations for their properties, being able to show a registered valuer the costs for all the improvements you have made to a property will be handy and possibly boost your valuation.
Opportunities in the changes to CGT and Negative Gearing
While we are on that budget, there are a few things that people have overlooked in all the excitement around the changes to CGT and Negative Gearing.
First up, commercial properties and newly built residential properties were not affected at all. It’s business as usual for investors in them. Same for people buying in SMSFs – provided they don’t need to borrow.
And there is a twist in the Negative Gearing changes around existing properties that a lot of people have overlooked.
The losses that were allowed under the ‘old’ rules are still largely there.
First up, losses on a property can still be claimed against the profits on other properties – just not against non property income. That is a benefit for people with more than one property, especially if one of them is positively geared.
Secondly, losses that can’t be claimed can be stored up and used to reduce CGT when an affected property is sold. So negative gearing on established properties is delayed, not cancelled.
You can read more about that here.
Varying your tax payments throughout the year to boost cash flow
A PAYG Withholding Variation is a practical way to enhance your regular cash flow instead of waiting until the end of the financial year for a lump-sum tax refund. If you anticipate major deductions—such as property depreciation—you can reduce the amount of tax withheld from your regular salary.
For example, if you expect to receive a $10,000 refund, this variation allows you to access those savings incrementally in each pay cycle. This strategy helps many Australian property investors keep their money working for them immediately.
The application process is straightforward, and you can get started online here.
We always recommend speaking with your accountant before applying. They can help review your expectations and ensure they are realistic.
There is often depreciation waiting to be claimed in older properties
This is the time of year when we get people with older properties calling up.
We can sense they have their fingers crossed as the ask if there might be any depreciation in them to claim.
Often it’s a property they have owned for a while and someone (occasionally their accountant) told them ages ago there was no depreciation in the property.
And of course, that is sometimes the case. If a residential property was built before 1987 there will be no depreciation to claim on the original building. But what about renovations?
Most 30-40 year old rental properties have been renovated. Sometimes it’s just a kitchen or a bathroom, but sometimes there are more substantial renos done by previous owners. And the current owners get to depreciate those renos – so they get a tax benefit without having to go through the cost of a renovation. All gain, no pain.
If in doubt, make an enquiry here. We can look at photos online and tell you quickly if it would be worth claiming depreciation on an older property. Better to be sure than leave money sitting on the table.
Make sure you’re claiming a Special Levy correctly
This is also the time of year when people who got hit with a Special Levy earlier in the year get in touch with us about how it should be treated. Many people assume it can be treated as a repair and take the cost straight to their accountant to claim, but that is often not the case. We last wrote about this here.
But we had an interesting call this week from someone who got a ‘please explain’ letter from the ATO about expensing his sinking fund contribution, which seemed odd at first (clearly they didn’t call us before they tried to claim this!).
Most people expense their regular contributions to their admin and sinking funds because those funds are usually used for expenses during the year.
We delved deeper and it seems the building where this client owned an apartment had needed some significant work – failing lintels – and rather than impose a Special Levy, the strata manager had opted to increase the sinking fund levy to cover the work.
That increase in the sinking fund levy was a lot. Enough to trigger a query from the ATO and an indignant call from that person to us – we are always happy to chat to people.
In this instance, we agreed with the ATO’s stance. The problems with the building existed long before the client started to rent out their property, so claiming that work as ‘repairs’ was never going to fly.
Do you have a residential or commercial property you would like us to help you claim depreciation for? Or a question about depreciation?
Order online now or call us on 1300 660 033 and rely on our 20-plus years of experience in estimating depreciation returns.
