Some costs, like loan interest, property management fees, insurance, and basic repairs, can usually be claimed in the same year you spend the money. These deductions can lower your taxable income straight away, making them a quick win for your finances.
Other costs, like borrowing fees, mortgage insurance, or depreciation on your property’s building and fittings, need to be spread out over several years. Big improvements to your property also fall into this category if they add long-term value.
Some expenses, like stamp duty, legal fees, and upgrades made in the first year, can’t be claimed immediately. Instead, they get added to your property’s cost base. This reduces the capital gains tax you’ll pay when you sell, saving you money down the track.
Think of your expenses as three groups: ones you can claim now, ones you claim over time, and ones that save you later. By knowing where each cost fits, you can plan smarter and get the most out of your investment.
Every dollar you spend has a purpose, whether it’s saving you tax now or building long-term value. Understanding how expenses work helps you get the best return from your property portfolio.
