Author name: Michael Sloan

Property depreciation is one of the most powerful tools for reducing your investment property tax bill. But many investors miss out on deductions simply because they don’t understand what they can and can’t claim. In this guide, we break down depreciation into simple terms — so you can maximise your return with confidence. What Is Property Depreciation? Depreciation allows you to claim a tax deduction for the decline in value of parts of your investment property over time. This includes both the building itself and the fixtures inside it. There are two main types of depreciation: Division 43: Capital Works (e.g. bricks, concrete, roofing) Division 40: Plant and Equipment (e.g. carpets, appliances, blinds) Division 43 – Capital Works Deductions If your property was built after 15 September 1987, you can claim capital works deductions at 2.5% per year over 40 years. These apply to the structure and any eligible renovations or improvements made after purchase. Division 40 – Plant and Equipment You can also claim depreciation on assets within the property that wear out faster, like air conditioning units, hot water systems, and flooring. However, you must buy the property brand new with no previous owner. If you buy a second-hand property, you can only claim Division 40 on new items you install yourself. What Can You Claim? Brand new builds: Division 40 + Division 43 Renovated older properties: Division 43 only (unless you install new fixtures) Second-hand properties: Capital works only (unless you replace plant items) Why It Matters Claiming depreciation correctly can save you thousands in tax over the life of your investment. Tax deductions make property investing viable for everyday Australians, and depreciation is a key part of those benefits. You’ll need to buy a new property to maximise your deductions. A tax depreciation schedule prepared by a qualified quantity surveyor is often the best way to ensure you claim everything you’re entitled to. Next Steps Not sure what your property qualifies for?Book a free strategy call and we’ll guide you through what you can claim and how to structure your investment for maximum tax efficiency.

Your Questions — Answered Are you thinking about investing in property but don’t know where to start? This guide walks through some questions I hear from new investors — in plain English, without the jargon. You can submit your question at the bottom of the page. Are Investment Properties Safe to Buy? Yes — as long as you know what you are doingt and buy the right property in the right location. That means a home-owner-quality property (not high rise apartment or niche property like student accommodation) in an area with long-term population growth. If the government’s building infrastructure nearby — roads, schools, hospitals — that’s a good sign. Before you commit, speak to someone independent. It’s easy to make a costly mistake by following the wrong advice. How Does Buying an Investment Property Work? Here’s the short version: Start with a deposit — from your savings or from equity in another property. Speak to a mortgage broker or lender about pre-approval. Look for a location with good growth potential and reliable rental demand. Understand the numbers: your cash flow, tax deductions, and long-term outlook. Buy something a homeowner will want to buy when you sell. What Value Property Can I Afford? It depends on your deposit and borrowing power. As a general guide: A $100,000 deposit may allow you to buy a property worth between $400,000 and $1,000,000 — depending on your income and your lender. Just make sure you understand how the after-tax cash flow will impact your lifestyle. Can I Buy Without a Cash Deposit? Yes — if you or a family member has equity in another property, the bank might allow you to use that as a deposit. This is often done through a guarantor loan, and it can be a useful way to get started without cash savings. Do I Need a 20% Deposit? No. Some lenders will let you buy with as little as 5% deposit — plus 5% in costs. Just keep in mind that if you borrow more than 80%, you’ll need to pay Lenders Mortgage Insurance (LMI). This protects the lender, not you. Can I Team Up With Someone Else? Yes — buying with a friend, family member, or partner is one way to get into the market sooner. Just make sure you agree in advance — and ideally in writing — how long you’ll hold the property, what happens if someone wants to sell, and how costs will be split. I Have a High Income But No Deposit. What Are My Options? You still have options. You could: Team up with someone who does have a deposit or equity Use a guarantor loan if someone is willing to support you Talk to an investment-focused broker or adviser who understands how to structure this properly. Are Interest Rates Higher on Investment Properties? Yes — they’re usually slightly higher than for owner-occupiers. But remember, the interest is generally tax-deductible. That means your after-tax cost is lower than it looks on paper. Will I Lose My First Home Buyer Grant? No — not if you’re buying an investment property first. You can still apply for the First Home Owner Grant later when you buy a property to live in. Want Help Getting Started? You don’t have to work it out alone. For over 20 years, I’ve helped Australians buy the right kind of investment property — low risk, long-term, and tailored to their financial goals. If you’ve got questions, we’ll talk it through. No sales pitch. Just advice that works. Do you have a question? Submit it here.  Book a Free Strategy Call

Property Tax Deductions: A Powerful Tool for Investors When done right, property investing doesn’t just grow wealth through capital gains — it also provides substantial tax advantages. From loan interest to property management fees and depreciation, most out-of-pocket costs tied to owning an investment property can be claimed as deductions. The key is knowing what you’re entitled to — and what to avoid. What You Can Claim on an Investment Property According to the ATO, most expenses associated with owning and managing an investment property are tax-deductible, including: Loan interest Repairs and maintenance Council and water rates Property management fees Insurance Depreciation of appliances and fixtures Capital works deductions (for buildings under 25 years old) 💡 Tip: Newer properties typically offer more generous depreciation benefits than older ones due to recent changes in legislation. What is negative gearing, and how does it affect my tax? Negative gearing occurs when the costs of owning an investment property—such as interest on the loan, maintenance, and management fees—are greater than the rental income it generates. This results in a net loss, which can usually be claimed as a tax deduction against your other income (like your salary). For many investors, this can reduce their overall tax bill and improve cash flow. If the full loss can’t be used in one year, it may be carried forward to future years. Are renovations tax deductible? Yes — but with conditions. Repairs (e.g. fixing a roof leak) are deductible in the same year. Renovations or improvements (e.g. kitchen upgrades) are claimed over time as capital works deductions. Understanding the difference is critical to claiming correctly. Can I claim depreciation? Yes. Depreciation allows you to claim the wear and tear on your building and its fixtures. New builds: Offer the most depreciation potential — often up to 40 years of claimable deductions. Older properties: Depreciation on the building (Capital Works) is available; how long it lasts depends on the property’s age. Are there expenses I can’t claim? Not everything is tax-deductible. You can’t claim: Stamp duty Travel to inspect your property Advertising to sell the property Costs related to buying (e.g. conveyancing) Can I really save tax with property? Absolutely — but only with the right property. For example, a brand-new four-bedroom home may offer over $400,000 in deductions in the first 10 years, thanks to depreciation, interest, and ongoing expenses. But not every property delivers that kind of benefit — and buying without advice can lead to disappointment. Final Thought Too often, investors buy a property hoping for tax savings, only to find the benefits aren’t there. The right property — matched to the right strategy — can make all the difference. Want to find a property that delivers real tax benefits? Book your strategy call today » Let’s look at your goals and show you what’s possible.

✨ Property Investment to Fund Your Retirement Real estate can be a smart and stable way to fund your retirement — but not every property will get you there. If your goal is to create a reliable income stream in your later years, you need a clear strategy, strong cash flow, and the right property. With expert planning, property investment can provide passive income, long-term capital growth, and tax benefits that support a comfortable lifestyle in retirement. ✨ Should I Use Property to Fund My Retirement? For many Australians, property feels more secure than shares or super. You can see it. You can control it. And it gives you the chance to generate income while building wealth. But it’s not automatic. You need to: ● Match your property choice to your retirement goals● Ensure the numbers stack up — especially cash flow● Buy in the right location with long-term growth and demand ✨ Key Questions to Ask Before You Invest ● What are your short and long-term retirement goals?● How much equity do you currently have?● Does the cash flow support your retirement needs?● Will this property grow in value over time?● Are there tax advantages or implications to consider? ✨ Pros and Cons of Property in Retirement Pros● Passive income from rent● Potential long-term capital growth● Depreciation and tax benefits● Tangible asset you control● Use equity to expand your portfolio Cons● High entry costs (deposit, stamp duty, legal fees)● Ongoing maintenance and management● Vacancy risk● Not always easy to sell quickly if needed ✨ Can I Use My SMSF to Buy Property? Yes — but it’s more complex than a regular purchase. You’ll need a mortgage broker or lender who specialises in SMSF lending, and your fund must comply with strict rules. ● The property must meet the sole purpose test● You can’t live in it or rent it to family members● You’ll need an SMSF structure in place before buying● Your loan options may be more limited than standard finance ✨ Will I Pay Tax on Rental Income in Retirement? Yes. Rental income is taxable — even in retirement. The amount of tax you pay depends on your total taxable income, including any super or pension withdrawals. The good news:● You can claim depreciation● You can deduct interest, maintenance, and management fees● These deductions help reduce your taxable income ✨ Speak with a Property Investment Specialist At The Successful Investor, we help Australians build wealth through smart, long-term property strategies — including for retirement. Get clarity on your financial position.Get a plan that works for your goals.And make confident investment decisions with expert guidance. 👉 Book a FREE Consultation with Michael Sloan today and learn how property can help fund your retirement.

Claim More, Pay Less: 2025 Investment Property Tax Tips If you own an investment property, you may be missing out on valuable tax deductions. The rules around what you can claim are complex—and they vary depending on your situation. Here’s what every property investor should know this financial year. What Are Investment Property Expenses? These are the ongoing costs of owning and maintaining a rental property. Common examples include: Property management fees Repairs and maintenance Insurance Interest on the investment loan Council and water rates Depreciation of fittings and construction Advertising for tenants Note: These deductions generally apply only to income-producing properties—not your private residence. Expenses You May Be Able to Claim in the Same Financial Year: Interest on loans Council rates Repairs and maintenance Depreciating assets costing $300 or less Advertising for tenants Water charges Land tax Cleaning, gardening and lawn mowing Pest control Insurance Legal expenses (related to rental activities, not purchase) Expenses That Must Be Claimed Over Time: Some borrowing costs Renovations Depreciating assets over $300 Construction costs (for properties built after 17 July 1985) What Can’t Be Claimed: Stamp duty on the purchase of the property Repayments of the principal portion of your loan Legal fees related to the purchase—these are added to the property’s cost base Utility bills paid by your tenants Tax legislation is always evolving, and each investor’s situation is different. That’s why it’s essential to speak with a qualified tax professional before you lodge your return. Let’s Make Property Investing Work for You At The Successful Investor, we help you secure investment properties that align with your financial goals—and connect you with trusted tax professionals to ensure you’re claiming what you’re entitled to. Book your free consultation today and take the first step towards smarter, low-risk investing.

Do you own an investment property and are wondering what the tax implications are of renovating? In this blog, we explore the ins and outs of tax deductions regarding property renovations in Australia. The difference between renovations and repairs It’s important that you are clear on whether the improvements you plan to make are renovations, routine maintenance or repairs, as this impacts how you claim them on tax. Repairs can be claimed in the current tax year, while renovations are considered ‘capital works deductions’ and are claimed over a longer period. Renovations are improvements that are made to increase the value of the property you own and rent out to tenants. The intention is to raise the future sale price, improve the rental yield, or make the property more desirable to tenants. This could include minor upgrades, such as adding storage or building a pergola. More major structural changes might include renovating the kitchen or bathroom or adding an extension. Repairs, on the other hand, are about addressing a maintenance issue, for example, repairing a broken air conditioning system or dealing with a roof leak. So, are investment property renovations tax deductible? Yes. If you are renovating a property for the purpose of generating income, such as by increasing its rental yield or capital value, then you can claim a tax deduction for the cost of the renovations. These are classified as ‘capital works deductions’ and are claimed over a longer period of time as depreciation. Investment property depreciation refers to offsetting the decline in value of the improvements against your taxable income. The ATO describes improvements that should be classified as capital works deductions as the following: provides something new furthers the income-producing ability or expected life of the property goes beyond just restoring the efficient functioning of the property. If you are planning on renovating your investment property, it’s important to seek professional advice from a qualified accountant or tax specialist to ensure that you understand the tax implications and are complying with ATO regulations. Are investment property repairs tax deductible? Yes. Expenses that are incurred in the ordinary course of running a rental property, such as repairs and maintenance, are usually fully deductible in the year they are incurred. Examples of this might include repairing a damaged fence, repainting the walls or repairing broken appliances. You must keep detailed records of all expenses, including receipts and invoices, to substantiate your claims. This is important to ensure that you don’t get caught out in the event of an ATO audit. As was mentioned above, it is important to seek professional advice as distinguishing between repairs and renovations is not always straightforward. In conclusion, it’s important to understand the tax implications of your investments. By taking the time to understand the tax deductibility of investment property renovations or repairs, you can make informed decisions that will help you maximise your returns. We specialise in helping property investors make the right investment choices. If tax considerations are a priority for you, book a free consultation with us today, and we’ll help you establish an investment strategy and find properties to suit your goals.