Situations we sort out
A rental schedule that reconciles, line by line.
Rental deductions draw standing ATO attention. The answer is not caution — it is records: interest apportioned and documented, repairs decided on facts, depreciation on proper schedules, and every figure traceable.
Rental property deductions sit under standing ATO attention, and the reasons are unglamorous: interest claimed on loans that were partly redrawn for private spending, repairs that were really improvements, expenses claimed while the property was not genuinely available to rent. None of these are exotic errors. They are what happens when a schedule is copied forward each year instead of prepared from the records.
We prepare rental returns from source: rent reconciled to agent statements and bank deposits; loan interest traced through the loan's actual history, with any private redraw apportioned and the working documented; repairs and improvements classified on their facts and written down, because the two are treated differently and the difference should be decided deliberately; depreciation carried on proper schedules rather than habit.
There is a longer game as well. Every rental year quietly contributes to the property's eventual capital gains calculation — improvements, depreciation claimed, periods of use. Kept properly now, those records make the sale year straightforward. We keep the rental file with that future in mind, because the cheapest time to build the sale's evidence is while it is being created.
What we see on rental schedules
- Loan redraws for cars and holidays buried inside an interest claim treated as fully deductible.
- Improvements described as repairs because the invoice said 'maintenance'.
- Depreciation copied from a schedule prepared for a different owner, or never obtained at all.
- Rent reconciled to nothing — the agent's summary, the bank and the return each telling their own version.
What goes into the return
Rent, reconciled
Rental income agreed between agent statements and bank deposits before it goes in the return, with the reconciliation kept.
Interest, traced and apportioned
The loan's history examined for redraws and mixed use; the deductible share worked out and the workings retained, not asserted.
Repairs versus improvements, decided
Classified on the facts of the work done — what it was, what it replaced, what it bettered — with the reasoning written down at the time.
Depreciation on proper schedules
Capital works and asset schedules obtained where warranted, applied correctly and carried year to year.
Expenses substantiated
Rates, insurance, agent fees, body corporate and the rest — claimed from invoices and statements, apportioned where the property's use requires it.
The sale file, building early
Improvement records and use history filed as they happen, so the eventual CGT calculation starts from evidence rather than archaeology.
A rental schedule from this office reconciles to the bank, the loan and the agent's statements — and files the evidence the property's eventual sale will need. See our method →
Common questions
I redrew on the investment loan to buy a car. Can I still claim all the interest?
Not all of it, and this is among the most common rental errors we see. Once a loan partly funds something private, the interest has to be apportioned between the purposes, and the apportionment has to be documented. We trace the loan's history, work out the deductible share, and keep the workings — so the claim that remains is one you can show.
What's the difference between a repair and an improvement?
A repair generally restores something to the condition it was in; an improvement makes it better, bigger or different. They are treated differently in the return, and the label on the invoice does not decide it — the facts of the work do. We classify each item on those facts and record the reasoning, so the treatment can be explained if it is ever questioned.
Do I need a depreciation schedule?
Often it is worth having one prepared by a specialist, but the answer depends on the property — its age, its history and what has been done to it. What we will not do is inherit last year's numbers unexamined. We assess whether a schedule would earn its keep for your property, obtain one where it would, and apply it correctly year after year.
The property was empty for a few months. Can I still claim the costs?
It depends on why it was empty. Costs during a period when the property was genuinely available for rent — advertised, priced for the market, able to be let — stand on different ground from costs during private use or an extended pause. The distinction is factual, so we document the facts: listings, agent instructions, the condition of the property. Then the claim follows the evidence.
We own the property jointly. How is the income split?
For most co-owned rentals the split follows legal ownership, and it applies to the income and the expenses alike — it is not a choice made each year for convenience. The ownership on title is the starting evidence, and the returns are prepared consistently with it across both owners. Where the ownership arrangement is genuinely more complicated, the position is documented before it is claimed.
Why do you keep talking about the sale? I'm not selling.
Because the sale, whenever it comes, is calculated from records created now — improvements, depreciation claimed, periods of private use. Owners who keep those as they go sell on evidence; owners who do not spend the sale year reconstructing a decade. Filing the records annually costs almost nothing while they exist. That is the discipline we build into every rental engagement.
General information only — not tax, legal or financial advice. Advice specific to your circumstances is provided within a signed engagement.
Related reading
Speak to the person who signs the return.
Consultations are with a registered tax agent — by phone or video, wherever you are in Australia.