Common Deductions
Below is a list of common deductions for property investment but it is recommended that you see a property savvy accountant to do your tax returns professionally.

• Advertising for tenants
• Accountant fee's
  
• Body Corporate/Strata fees
• Property Management fee's
• Cleaning
• Gardening/Lawn Mowing
• Depreciation
• Electricity/Gas/Water (If you are paying any of these)
• Insurance Costs (Building insurance/Landlord Insurance)
  
• Council Rates
• Land Tax
• Emergency Services Levy
• Legal Expenses
• Lease Expenses
• Repairs/Maintenance
• Pest Control
• Telephone Expenses
• Travel Expenses (Collecting Rent, Inspections, etc)
  
• postage
• Depreciation Report
• magazines
• seminars

Borrowing Expenses
These can include the following items

• Interest on investment loans
• Bank charges
• Lenders Mortgage Insurance
• Title Search fee's
• Stamp Duty on mortgage
• Loan Establishment fee's
• Registration of mortgage

But not all of these are deductible in the first year of owning your investment property. Any yearly expenses you have are deductible in the year that you incur them such as the interest on your loans, but the majority of the other fee's must be deducted over 5 years. But if you were to sell the property at 3 years then you would be able to claim the 3,4,and 5 years deductions for borrowing expenses in the year it was sold.

Depreciation
There are two types of depreciation that can be claimed on an investment property and each of them attract a different rate of depreciation. Below are some details of the different types of depreciation

Capital Works
This deduction is known as the special building write off and its calculated based on the cost of construction of the investment property. Capital works deductions include:

• A Building or Extension - I.e Adding a room, garage, patio, or pergola
• Alterations - Removing or adding internal walls
• Structural Improvements - Gazebo, carports, driveways, retaining wall, or a fence

You can only claim capital works deductions while the property is available for rent, and if the construction costs were incurred by a previous owner, you are able to claim the undeducted construction costs as the new property owner as long as the property remains income producing.

Capital works deductions can generally be claimed at a rate of 2.5% p.a over 40 years. So if an investment property cost $200,000 to build you would have access to $5000 worth of deductions for the next 40 years.

Capital Allowances
You can claim a deduction for the decline in value of a depreciating asset. The asset must have been used, or installed ready for use, for income-producing purposes. These assets include

• Air-Conditioning
• Carpets
• Hot water system
• Kitchen equipment - Stoves, range hoods, ovens
  
• Floor coverings
• Security system
• Water tanks
• Blinds/Curtains/Drapes
• Electrical Machinery - Motors, Lighting
• Furniture and Fittings
• Gardening equipment
• Pumps
• Ventilation fans

For an average house that has just been constructed you would expect to receive around $20,000 of capital allowance deductions that can be written off.

Depending on the type of equipment they can be written off over 5-16 years, so it is important to obtain a depreciation report from a qualified quantity surveyor so you have the correct deductions.

Depreciation Report
A depreciation report can be drawn up by a quantity surveyor after a property has been constructed or after a property has been bought and these costs will be estimated and put into a "Depreciation Report" that can be given to your accountant to use at tax time.

Tax Variation
Once you have an estimate of all of your investment costs for the year you can do to an accountant and they can lodge a income tax variation form so that you can get your deductions back on a weekly/fortnightly/monthly basis depending on how often you get paid.

Another Option is to download the Tax variation form from the ATO Website and complete it yourself if you feel confident in doing so. Its called a Individial Tax Withholding Variation (ITWV), It is also possible to lodge the form on the ATO website electronically.