Australia’s end-of-financial-year rush is here. Spare-room rentals, short-stay listings and renovation bills all leave a digital trail the Australian Taxation Office (ATO) now mines with precision. Are your records robust enough to pass inspection? Below you will find a quick-fire guide that keeps your property income compliant and your deductions defensible.

Boomer “nesters” – renting out the spare room

Capital Gains Tax (CGT) alert – Your home remains CGT-free only while every square metre is private. The moment a bedroom becomes a rental, that slice of the dwelling moves inside the CGT net. Could that bite you when the house is eventually sold?

Declare the income – Rent from boarders is assessable. Lodge it as you would any other rent.

Apportion every expense – Claim only the percentage that relates to the rented space – electricity, rates, insurance, even streaming services if guests use them. Precision protects you in an audit.

Mind the Age Pension – Extra income and the value of additional assets may tip you over the pension thresholds. Have you modelled the trade-off?

Landlords – deductions the ATO loves to test

Repairs versus improvements – Fixing cracked tiles is an immediate deduction. Replacing the bathroom is a capital improvement written off over decades. The ATO now matches Bunnings receipts to returns, so label each invoice and store clear photos.

Genuine market rent – A property must be available at a realistic rate. Advertising at a silly price, blocking weekends for family or pausing for drawn-out renovations shrinks your deductible window.

Property-management fees – Claim fees only for agents you actually engaged. Keep signed authorities on file.

Depreciation on second-hand assets – Buying a house after 9 May 2017? You cannot depreciate used dishwashers, curtains or air-conditioners unless you installed them brand-new.

Travel is dead – Since 2017, trips to inspect a rental are non-deductible. The ATO’s analytics spot rule-breakers instantly.

Wait for the pre-fill – Most banks and insurers upload data by late July. Lodging early increases amendment risk – and scrutiny.

First-home buyers – think ahead

Renovation costs on your own home are not deductible now, but they set the cost base for future CGT or depreciation if you later lease the property. Do you have a folder of receipts ready for that possibility?

Vacant-land owners – tighter rules bite

Since 1 July 2019, individuals, SMSFs and passive trusts can no longer claim holding costs on vacant land unless it is already used in a business. Interest, council rates and mowing bills instead add to the land’s cost base and reduce your gain when you sell. Even light income such as agistment or a billboard could reopen deductions – have you explored that option?

Short-stay hosts – space and time apportionment

Airbnb and similar platforms share booking calendars with the ATO. Deduct only the portion of expenses that relates to guest-nights and guest-area floor space. Claim capital upgrades over time, not as repairs, and ignore days the property sat empty or was kept for personal use.

Good records are the cheapest audit insurance. PDFs, CSVs, photos and signed agreements all count; unexplained credit-card lines do not. Unsure about a claim? A formal tax-depreciation schedule often costs less than an audit adjustment.

Questions about how property income or future plans will affect your bottom line? Contact your local First National Real Estate office and speak with a trusted adviser today.

Issued by First National Real Estate:

Stewart Bunn, Communications & Corporate Affairs, 0413 624 317

N.b. This article provides general information only and is not financial, legal or taxation advice. Tax laws and regulations change, and their application depends on individual circumstances. You should seek independent, qualified advice before acting on any information contained here. First National Real Estate, its officers, employees and agents accept no liability for any loss arising from reliance on this material.