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An investment property is easy to buy and surprisingly hard to own well. The difference between a rental that quietly drains you and one that builds wealth often comes down to the tax detail: which expenses you claim now, which you claim over years, how depreciation works on the building versus the fittings, and what capital gains tax will do to you the day you sell. Crest Accountants has advised Gold Coast property investors from our Burleigh Heads office since 1973. As your rental property accountant, our job is to turn the compliance chore into a return you can actually measure.
Why an investment property needs a specialist accountant
Any tax agent can enter your rent and your interest into a return. A property accountant knows where the money actually hides: the borrowing costs spread over five years that people forget, the depreciation schedule that pays for itself several times over, the repair that is really a capital improvement, and the deductions you claimed that quietly increase your tax when you sell. The ATO has said that around nine in ten rental property owners make an error in their returns. Most of those errors are avoidable with the right advice from the start.
How your rental income is taxed
Rental income is added to your other taxable income and taxed at your marginal rate. You are taxed on the net figure: rent received, less the expenses the law allows you to deduct. Get the deductions right, and both the net figure and the tax on it can look very different. That is the whole game, and it is worth understanding what falls into each bucket.
What you can and cannot claim
Claimed in the same year
The everyday running costs of a rental are generally deductible in the year you incur them: loan interest, council rates, water rates, land tax, insurance, property-management and letting fees, advertising for tenants, and genuine repairs and maintenance. The ATO sets out the full picture of what you can claim on a rental property, and the detail matters.
Claimed over time
Some costs are spread over years rather than claimed at once. Borrowing costs such as loan establishment fees and lender’s mortgage insurance are generally deductible over five years, or the loan term if shorter (or in full in the first year if the total borrowing cost is $100 or less). Capital works, meaning the structure of the building itself, are deducted gradually as well. And plant and equipment, the removable assets inside the property, decline in value over their effective life. More on that below.
Repairs versus improvements, the line that trips investors up
Fixing a leaking tap is a repair, and generally deductible now. Replacing the whole bathroom is an improvement, and treated as capital, deducted over time or added to your cost base. Initial repairs to fix defects that were already present when you bought the property are also capital in nature, added to the property’s cost base rather than claimed as an immediate deduction. People routinely claim an improvement as a repair and create a problem that only surfaces in an audit. When it is genuinely a grey area, we check rather than guess.
Travel to your property
If you own residential rental property as an individual, you generally cannot claim the cost of travelling to inspect it, maintain it or collect the rent. This has been the case since 1 July 2017, and it still catches out investors who assume a trip to check on the property is deductible.
Depreciation: Division 43 versus Division 40
Depreciation is the deduction most investors under-claim, and it splits into two parts. Division 43 capital works covers the building structure and fixed items, typically deducted at 2.5% a year over 40 years for eligible construction. Division 40 covers plant and equipment, the removable assets such as carpet, blinds, ovens, air conditioners and hot-water systems, deducted over their effective life. A quantity surveyor prepares the schedule that sets these numbers, and for most properties it more than pays for itself.
The second-hand asset rule that surprises people
Here is the trap. If you buy an established residential property, the rules on second-hand depreciating assets generally stop you claiming Division 40 depreciation on the existing plant and equipment that came with the property, unless you fall into a limited exception. The building itself, under Division 43, is unaffected, and brand-new assets you install are fine. This is why a depreciation schedule on an established Gold Coast unit looks different from one on a brand-new build, and why it is still worth getting one done rather than assuming there is nothing to claim.
Negative and positive gearing explained
A property is negatively geared when its deductible costs exceed the rent, producing a loss. Under current law, that loss can generally be offset against your other income, such as your salary, reducing your overall tax. A positively geared property makes a profit and adds to your taxable income. Neither is something you set out to choose; how a property is geared is simply the result of its rent, costs and borrowings in a given year. All else being equal you would rather make money than lose it, so a rental loss is only worth carrying if you expect capital growth to more than outweigh it over time. Negative gearing lowers the after-tax cost of holding a property, but the tax benefit never turns a loss into a gain on its own. Which position suits you depends on your income, your goals, your borrowing and your other assets, and it is worth modelling before you buy.
Improving your cash flow with a PAYG withholding variation
If your property runs at a loss, you do not have to wait until you lodge your return to feel the benefit. A PAYG withholding variation asks the ATO to reduce the tax taken from each pay, so the negative-gearing benefit arrives across the year rather than as one refund. It is a simple, under-used lever that can materially improve your monthly cash flow, and we can set it up and manage it for you.
Capital gains tax when you sell
The tax on a sale is decided long before settlement, which is why the time to talk to us is before you list. If you have owned the property for at least 12 months, the CGT 50% discount currently halves the taxable gain for individuals. The CGT event is usually the contract date, not settlement, so a contract signed in late June lands the gain in that financial year even if settlement is months away. And the depreciation you claimed along the way comes back to matter: capital works deductions you have claimed generally reduce your cost base, which increases the gain you are taxed on. Our capital gains tax accountants map all of this before you commit.
Proposed 2026-27 Budget changes to negative gearing and CGT
The rules described on this page reflect the law as it stands in August 2026. In the 2026-27 Federal Budget the Government announced proposed reforms that, if legislated, would change how some of this works. In short, negative gearing on established residential properties acquired after 12 May 2026 would be limited, so that net rental losses could no longer be offset against non-rental income, though the losses could be carried forward, with new builds and properties already held before that date generally excluded. Separately, the 50% CGT discount is proposed to be replaced with cost base indexation and a minimum tax on net capital gains from 1 July 2027, with the main residence exemption unchanged. These measures are announcements only and remain subject to the passage of legislation, so the current rules continue to apply until any changes take effect. If you bought before the announcement, or are weighing up a purchase now, talk to us about where you sit and we will keep your position current as the detail is confirmed.
Short-stay and holiday letting on the Gold Coast
Holiday letting is a big part of the Gold Coast market, and it carries its own rules. If a property is only available for rent part of the year, or you use it yourself for part of the year, expenses have to be apportioned rather than claimed in full. Renting out part of your own home, or the whole thing through a short-stay platform, can also affect the main-residence exemption when you eventually sell. We handle the apportionment and keep the CGT consequences in view so a few weeks of holiday income does not create a tax surprise years later.
Ownership structure and co-ownership
Whose name the property is in drives who gets the deductions and who pays the CGT. For co-owned property, deductions and gains are generally split according to the legal ownership shares on the title, not according to who actually pays the bills. Buying in an individual name, jointly, through a trust or inside a self-managed super fund each has different tax, asset-protection and borrowing consequences. If you are still deciding, we model it before you buy through our business and trust structuring service and, for super, our SMSF specialists. Changing structure after you own the property usually triggers tax, so this is a decision worth getting right at the start.
Record-keeping and what draws the ATO's eye
Rental deductions are a standing ATO focus area, and the nine-in-ten error rate is why. Keep your agent statements, loan documents, rates and insurance notices, receipts for repairs and improvements, and your depreciation schedule. Records that support a CGT calculation should be kept for at least five years after you sell. Good records are the difference between a deduction that holds up and one that unravels under review.
How Crest helps property investors
We prepare your rental schedules and returns, make sure the depreciation and borrowing costs are captured, advise on structure and land tax exposure, set up PAYG variations for cash flow, and plan the CGT position well before any sale. You deal with the same Burleigh Heads team each year, the work is done in-house, and the fee is quoted before we start.
Talk to a Gold Coast property accountant before your next move. Call Crest Accountants on 07 5538 0999 or send an enquiry through the contact form.
Frequently Asked Questions
You can generally claim any expense that directly relates to earning rental income, including loan interest, property management fees, council rates, land tax, insurance, repairs and maintenance, and depreciation. Expenses must only be claimed for periods when the property was rented or genuinely available for rent. The ATO estimates that 9 in 10 rental property owners make errors in their returns, so getting this right matters.
Generally on the contract date, not settlement. A contract signed in late June puts the gain in that financial year even if settlement happens later. If you have owned the property for at least 12 months, the 50% discount generally applies for individuals. Because timing and cost-base detail change the result, it pays to get advice before you sign.
For residential rental property held by individuals, generally no. Travel to inspect, maintain or collect rent has not been deductible since 1 July 2017. Different rules can apply to those carrying on a rental business, which is worth checking with us if that might be you.
You may. Queensland charges land tax once the taxable value of the land you own passes the relevant threshold, with different thresholds for individuals, companies and trustees. You can see how it works on the Queensland land tax overview, and we factor your likely exposure into your investment planning.
No. Many of our property clients are local to Burleigh Heads and the southern Gold Coast, and you are welcome at the office. But property tax depends on your documents and dates, not where you live, so we act for investors across Queensland and around Australia by phone and video.
Buying, holding or selling an investment property?
Book a free consultation with Crest Accountants on 07 5538 0999 or send an enquiry through the form, and get the tax position clear before you act.
