EOFY Property Investor Checklist (2025-26): Rental Deductions Before 30 June

General information only. This is not tax or financial advice. Consult a registered tax agent for advice specific to your situation.

Investment property owners have a range of deductions that are sensitive to timing around 30 June. Some can be brought forward, some require specific records, and some have traps that catch people every year. This checklist covers the main items to review before the end of the 2025-26 financial year.

Prepay loan interest

If your investment property loan allows it, you can prepay interest for up to 12 months in advance and claim the full amount as a deduction in the current year, provided the prepayment period ends before 30 June of the following year.

• Check with your lender whether prepayment is possible and what fees apply
• The 12-month rule is strict — prepaying for 13 months means you must apportion
• This strategy is most effective if your marginal tax rate is higher this year than you expect it to be next year
• Refinancing costs and loan establishment fees are generally deductible over the life of the loan, not upfront

Repairs versus improvements: get the timing right

Repairs to restore something to its original condition are immediately deductible. Improvements that enhance, upgrade, or replace something with a better version are capital expenditure and must be depreciated.

• Replacing a broken fence paling is a repair. Replacing the entire fence with a new design is an improvement.
• Fixing a leaking tap is a repair. Renovating the bathroom is an improvement.
• If you are planning genuine repairs, completing them before 30 June means the deduction falls in 2025-26
• If work includes both repairs and improvements, ensure your invoices separate the two — a single lump-sum invoice makes it harder to identify the deductible portion

The ATO scrutinises repair claims on recently purchased properties. If you buy a property and immediately do work to bring it up to a rentable standard, that work is more likely to be treated as an improvement (capital) rather than a repair.

Depreciation schedule

If you do not already have a tax depreciation schedule prepared by a qualified quantity surveyor, arranging one before 30 June ensures you capture the full year’s depreciation deductions.

• Division 40 (plant and equipment): Covers removable items like carpets, blinds, hot water systems, air conditioners. For properties built after 9 May 2017, only the original owner can claim Division 40 deductions on previously used assets.
• Division 43 (capital works): Covers the building structure itself, at 2.5% per year for properties built after 15 September 1987. This deduction is available regardless of when you purchased the property.
• The cost of getting a depreciation schedule prepared is itself tax deductible.

Land tax payments

Land tax is deductible for investment properties in the year it is incurred (which typically means the year the assessment notice relates to, not necessarily when you pay it).

• Check your state or territory land tax assessment for the current year
• If you own property in multiple states, each state’s land tax is a separate claim
• Land tax on your main residence is generally not deductible

Insurance timing

Landlord insurance premiums are deductible in the year they relate to. If your policy renewal falls near 30 June, the timing of payment can shift which year the deduction falls in.

• Prepaying the next year’s premium before 30 June is generally deductible upfront if the coverage period is 12 months or less
• Building insurance, landlord insurance, and contents insurance for the rental property are all deductible
• Public liability insurance related to the rental is also deductible

Property management fees

If you use a property manager, their management fees and any letting fees are deductible. Paying outstanding invoices before 30 June ensures they are claimed in 2025-26.

• Management fees (typically a percentage of rent collected)
• Letting fees for finding new tenants
• Advertising costs for tenant searches
• Lease preparation costs

Building write-off (Division 43)

The building itself (not the land) can be written off at 2.5% per year of the original construction cost for eligible properties. This applies to:

• Residential rental properties where construction began after 15 September 1987
• Extensions and structural improvements made after that date
• The deduction continues for 40 years from the date construction was completed

If you purchased the property and do not know the original construction cost, a quantity surveyor can estimate it.

Action items before 30 June

• Check with your lender about prepaying investment loan interest
• Complete any genuine repair work and get invoices that separate repairs from improvements
• Arrange a tax depreciation schedule if you do not have one
• Pay any outstanding property management invoices
• Review land tax assessments and confirm they are recorded
• Consider prepaying landlord insurance if the renewal timing works
• Confirm rental income and expense records are complete for the year
• Collect all receipts for property-related travel, body corporate fees, and council rates

Key dates

• 30 June 2026 — Last day to incur or prepay deductible expenses for the 2025-26 income year.
• 31 October 2026 — Self-lodgement deadline for individual tax returns.

Next step

• Model your investment property’s tax impact with the Investment Property Calculator
• Estimate depreciation deductions with the Depreciation Calculator

This is general information only. Rules and thresholds can change. Check with the ATO or a registered tax agent for your specific situation.