Tax Tips for Property Investors 2025

14/07/2025

Tax Tips for Property Investors 2025

Tax Tips for Property Investors: What You Can (and Can’t) Claim in 2025

As we head into the 2025 end of financial year (EOFY), property investors face a fresh wave of tax updates and closer scrutiny from the ATO. If you own a rental, holiday home, or short-stay investment, understanding what you can claim (and what the ATO is watching) could make a big difference to your tax return.

From capital gains tax to depreciation schedules, here’s your 2025 tax guide to claiming smarter and staying compliant this EOFY.

What's New in 2025? The ATO Is Watching Closely

The ATO has stepped up its game, using AI and data matching to detect errors in rental property claims faster than ever. Expect extra scrutiny on:

  • Interest on mixed-use loans (where personal and investment spending is combined)
  • Incorrectly split deductions between private and rental use
  • Misclassified capital improvements claimed as repairs
  • Missing or understated income (especially from Airbnb or short-stay rentals)

Cashflow Tip: If your investment loan is mixed with personal use — it’s time to separate them. A cleaner structure = safer deductions.

Holiday Homes & Short-Stay Rentals: Stricter Rules Apply

From July 2024, states like NSW, VIC, and WA started sharing short-stay data directly with the ATO. That means if your Airbnb or holiday home sat empty, the ATO will know — and deductions won’t apply unless the property was genuinely available for rent.

To claim, ensure:

  • No deductions during personal or family stays
  • The property is listed at a realistic rental price
  • Booking platforms show availability and not excessive blackout periods

What Can Property Investors Claim at Tax Time?

Here’s a quick breakdown of common tax deductions:

  • Loan Interest & Fees: You can claim interest on loans used solely for investment. No claims on funds used for personal expenses (e.g. a new car).
  • Negative Gearing Losses: If rental income is lower than expenses, the loss may be deductible.
  • Property Repairs & Maintenance: Repairs (like fixing a leaky tap) are deductible. Capital upgrades (like a new kitchen) must be claimed over time.
  • Depreciation: Claim gradual wear and tear on buildings and appliances. A depreciation schedule is a must-have.
  • Property Management Fees
  • Insurance, Strata & Council Rates (not paid by tenants)
  • Advertising & Marketing
  • Pest Control, Cleaning, and Admin Costs

Not sure if an expense qualifies? Don’t guess — ask us first.

Capital Gains Tax (CGT): Plan Ahead, Save More

If you sold an investment property this year, CGT could apply — but smart timing and planning can make a big difference.

Top CGT Tips:

  • Settlement Date Matters: CGT is at the contract date, not settlement date. Selling or disposing of an asset will trigger a CGT event and you may have a capital gain or capital loss. If there is a contract of sale, the CGT event happens when you enter into the contract. For example, if you sell a house, the CGT event happens on the date of the contract, not when you settle.
  • Hold >12 Months? You may be eligible for a 50% CGT discount.
  • Offset Losses: Capital losses from other assets (e.g. shares) can reduce your CGT bill.
  • Watch Out for Main Residence Rule Exceptions: Renting out your former home? You may still face partial CGT.

Don’t Miss Out on Depreciation Schedules

A depreciation schedule, prepared by a qualified quantity surveyor, outlines claimable wear and tear on your property and assets. You can claim:

  • Capital Works (Division 43): Building structure — brickwork, roofing, etc.
  • Plant & Equipment (Division 40): Fixtures like carpets, appliances, blinds

Even older properties may qualify, especially if renovated. The cost of the report itself is tax-deductible and usually pays for itself in the first year.

How to Get EOFY-Ready as a Property Investor

Here’s how to make this tax season smoother and more rewarding:

  1. Keep Good Records: Save receipts for all rental-related expenses. Use digital tools or folders to stay organised.
  2. Check Depreciation Schedules: Update after renovations or new purchases.
  3. Get Advice Early: Don’t wait until June 29 to scramble — book your tax planning session now.
  4. Consider PAYG Variations: Want more regular tax relief? Ask us about adjusting your PAYG so deductions are applied throughout the year.
  5. Plan Repairs or Upgrades Now: Completing work before 30 June may boost next year’s deductions.
  6. Track Short-Stay Income: Airbnb and Stayz report to the ATO. Log your rental availability and earnings accurately.

Common Tax Mistakes to Avoid

Even experienced investors can get tripped up. Here’s what not to do:

  • Mixing Personal & Investment Use: Keep loans and accounts separate.
  • Overclaiming Repairs: Replacing a roof = capital improvement, not a repair.
  • Forgetting Short-Stay Income: It’s reported — don’t skip it.
  • Missing Outdated Schedules: Renovated recently? Update your depreciation report.
  • Leaving It Too Late: Get organised before June.

What the ATO Is Focusing On in 2025

This year, the ATO is paying extra attention to:

  • Underreported Airbnb income
  • Incorrect interest deductions on loans
  • Claims made while the property wasn’t available to rent
  • Misclassified repairs vs improvements
  • Missing or out-of-date depreciation schedules

Need Help Claiming Smarter This Year? Call us we are here to help.

At Cashflow Financial, we help property investors simplify tax time, stay compliant, and maximise deductions. Whether you're new to investing or managing multiple properties, we’ll guide you through the latest rules — and help you prepare for a more profitable year ahead.
Contact us today and let’s get your property strategy working harder for you.