Tax Savings Write Offs · Koste Knowledge Base

What investment property expenses are immediately deductible?

Published 26 June 2026 · Last updated 26 June 2026

Quick Answer

Some rental property expenses may be immediately deductible, such as certain repairs, property management fees and smaller eligible asset purchases. Other costs, such as renovations, improvements and building works, may need to be claimed over time.

Immediate deductions usually relate to expenses connected with earning rental income in that year.

Examples may include:

Property management fees
Council rates
Water rates
Insurance
Some repairs and maintenance
Accounting fees
Advertising for tenants
Certain small assets, where conditions are met

Costs that may not be immediately deductible include:

Full renovations
Extensions
Initial repairs after purchase
New building works
Structural improvements
Some replacement assets
Capital improvements

These may instead be treated as Division 40 depreciating assets or Division 43 capital works.

Koste.ai can help investors identify when an expense may need to be reviewed as depreciation rather than treated as a simple immediate deduction.

Frequently Asked Questions

Are repairs immediately deductible?

Some repairs may be, but the timing and nature of the work matter.

Are renovations immediately deductible?

Usually not. Renovations are often capital works or depreciating assets.

Are new appliances immediately deductible?

It depends on the cost, asset type and ATO conditions.

Who decides the final tax treatment?

Your accountant or tax adviser.

Can Koste.ai classify expenses?

Koste.ai can help organise property cost information and identify items needing review.

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Written by Koste Team · Koste Chartered Quantity Surveyors · AIQS Member · RICS Member · TPB Registered · 1300 669 400 · info@koste.ai