Investment property deductions you may be overlooking

You may think about the more obvious expenses like loan interest, repairs and property management fees, but one area that’s easy to overlook is depreciation.

Depreciable assets may be hidden under the floor, inside walls, on the roof or even below ground. If they are not identified properly, you could miss deductions that may help lower the cost of ownership.

Why depreciation is worth checking

Property depreciation allows investors to claim deductions for the decline in value of eligible assets, as well as certain construction costs and improvements.

Depending on the type of property you own, you may be able to claim deductions for both the building itself and certain fixtures, fittings and improvements. Some deductions can also continue for many years, which means overlooking them can have a long-term impact.

Here are a few things that can be easy to overlook when assessing your property’s depreciation deductions: 

Improvements you cannot easily see

Rewiring, re-plumbing and structural work such as re-stumping may be eligible for depreciation deductions in your property’s assessment.

These improvements may still be relevant, even if they were completed before you bought the property.

Features under floors and on roofs

Underfloor heating is another example of an asset that can be forgotten because it is out of sight.

The same applies to roof-mounted systems such as solar pool heating. Once installed, these features tend to blend into the property, but they may still carry depreciable value.

What about rural properties?

Properties outside metropolitan areas can have additional infrastructure that you may not immediately think about at tax time.

Sewage treatment systems, tanks and underground piping are examples of assets that can potentially be included when assessing depreciation.

Look beyond the obvious

Every investment property is different, which is why a proper depreciation assessment is always worth it.

A qualified quantity surveyor will inspect the property, review eligible improvements and identify items that may otherwise be missed. This may help reduce your taxable income and make the ongoing cost of owning an investment property more manageable.

Finally, it’s also worth being aware that changes to negative gearing will apply from 1 July 2027. While they do not affect deductions for the 2025–26 financial year, updates may affect how some property investors can use rental property losses in future years. Speak with your accountant about what the changes could mean for you.