Just Bought an Investment Property? How to Maximise Your Tax Deductions in 2025

Buying a new investment property is an exciting step—but once the settlement dust settles, many investors are left wondering: What expenses can I actually claim on my tax return?

At Investax, we receive this question regularly – “How do I maximise my property tax deductions?”. Whether you’ve just picked up the keys to your first rental or are adding to a growing portfolio, understanding what’s immediately deductible, what needs to be capitalised, and what can be depreciated is key to getting the most out of your investment.

This guide will walk you through the main tax considerations after purchasing a property so you can claim everything you’re entitled to—without overstepping ATO rules.

1. Not Everything Is Immediately Deductible

Let’s start with the big misconception: just because you spent money doesn’t mean it’s instantly deductible.

Some costs associated with purchasing or improving the property must be capitalised—meaning they’re added to the cost base and used to reduce capital gains when you eventually sell. Others may be depreciated over time, while a smaller portion can be claimed immediately in your annual tax return.

Knowing which-is-which is essential to avoid claiming the wrong thing—or worse, missing out altogether.

2. Costs Base = Purchase Related Costs 

Most of the costs you pay to acquire the property aren’t deductible in the year you buy it—but they’re still important because they form part of your cost base for future Capital Gains Tax (CGT) purposes. Many property investors don’t fully understand what a cost base is or assume it doesn’t matter because it doesn’t affect their immediate tax return.

However, you’re buying a long-term investment, and when the time comes to sell, your cost base can make a significant difference to how much CGT you pay. If you don’t collect and keep records of these costs from the start, you risk forgetting valuable items that could have reduced your future tax bill. Keeping every invoice, settlement statement, and supporting document now means you won’t miss out on legitimate cost base additions years down the track.

These capital costs include:

• Stamp Duty
• Buyer’s Agent Fees
• Conveyancing or Legal Fees
• Pest and Building Inspection Costs
• Mortgage Registration and Transfer Fees
• Search Fees and Title Insurance

✅ Tip: Keep a file of all your settlement documents and invoices. You’ll need them when you eventually sell the property—even if it’s 10 years from now.

3. Loan Setup Costs – A 5-Year Tax Deduction Many Forget

Some upfront costs related to your investment loan—such as loan application fees, title search fees, and lender’s mortgage insurance (LMI)—aren’t immediately deductible. However, you may be able to claim them over five years (or the life of the loan, whichever is shorter).

This typically includes:

• Loan establishment or application fees
• Title search fees charged by your lender
• Lender’s Mortgage Insurance (LMI)
• Mortgage broker fees
• Valuation fees required for loan approval
• Fees for preparing and filing mortgage documents (e.g. solicitor fees)
• Stamp duty charged on the mortgage (not stamp duty on the property purchase)

✅ Tip: Always keep your initial loan settlement statement (also known as a disbursement statement). This document lists all loan-related costs paid at settlement, making it easier for you or your accountant to correctly identify and claim these expenses over time. Keeping and submitting this record ensures you don’t miss valuable deductions.

4. Property Seminars, Courses, and Mentoring Fees

Many investors attend seminars or engage mentors to learn about property investing, either before or after buying a property. The tax treatment depends on the timing and purpose of the expense.

If you paid these fees before buying a property, the ATO does not allow a deduction because the expense is considered too early in the process. It’s treated as general investment education or research and can’t be added to your cost base for capital gains purposes either, as it’s not directly linked to the acquisition of a specific property.

If you already own an investment property, some part of the fees for courses or mentoring may be deductible if they are directly related to improving how you manage that property, increase rental returns, or meet your tax obligations as a landlord. Where the course includes general content or private elements, you can only claim the portion connected to your current rental activity.

✅ Tip: Keep receipts and course details so your accountant can determine whether a deduction applies. If it doesn’t, you know not to factor it into your tax return or cost base calculation later.

5. Initial Repairs – Immediately After Settlement 

If you did any repairs immediately after purchasing the property to fix existing issues (e.g. patching a hole, replacing a broken tap, repainting walls), these may not be immediately deductible.

Why? Because they’re often considered initial repairs, which are deemed to relate to the state of the property at the time of purchase. The ATO treats them as part of the capital cost and adds them to the cost base.

✅ Tip: Document the condition of the property at settlement. If the repair isn’t urgent, consider holding off until after the property is rented, so future maintenance costs relate directly to earning income and may be deductible.

6. Depreciation – One of the Most Missed Deductions

If you’ve bought a newly built property, your depreciation benefits can be significant. You may be able to claim:

• Capital Works Deductions (building structure)
• Plant & Equipment Deductions (appliances, carpets, blinds, etc.)

Even if you’ve purchased a second-hand property, you can still claim capital works on renovations or additions made after 1997.

✅ Tip: Engage a qualified quantity surveyor to prepare a depreciation schedule. The one-off cost is tax deductible and can save you thousands over the life of the property.

7. Expenses You Can Claim Immediately

Once the property is available for rent, you can start claiming ongoing deductions, including:

• Advertising for tenants
• Property management fees
• Council rates, water rates, and strata levies
• Insurance (landlord, building, and contents)
• Repairs and maintenance (not initial repairs)
• Loan interest
• Depreciation (if report is available)
• Cleaning, gardening, and pest control

Make sure your property was genuinely available for rent (e.g. listed online) before claiming deductions.

8. What If the Property Was Vacant or Under Renovation?

If your property wasn’t available for rent right after settlement—say, because you were renovating or planning to move tenants in later—you can only start claiming deductions from the point it was genuinely available for rent.

Simply settling the property isn’t enough. There needs to be clear evidence of rental intent (like online ads or an agent listing) for the ATO to accept it.

✅ Tip: If in doubt, keep screenshots of ads and listing dates to prove the property was available for lease.

Final Tip & Conclusion

Purchasing an investment property is just the first step—how you manage your deductions from day one makes a huge difference in the long run. The ATO has become increasingly focused on rental property deductions, so it’s more important than ever to get things right.

At Investax, we help property investors structure their finances, track the right expenses, and maximise their deductions while staying compliant. If you’re not sure whether something is claimable or capital, ask early—it’s far easier to set things up properly than to clean up later.

An accounting fee paid to a good accountant should be seen as an investment—not a cost. Especially when that fee is 100% tax deductible, it pays to work with someone who understands property.

Just bought a property and not sure what you can claim? Maybe it’s time to give Investax a go.

General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.Although every effort has been made to verify the accuracy of the information contained on this page and on our website, Investax Group, its officers, representatives, employees and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.