Rental property checklist: records to keep

Rental property claims are among the most closely reviewed items on an individual return, and most problems come down to missing paperwork or expenses in the wrong category. Keep this list with your property file. The first section is a one-off at purchase; the rest repeats every year until you sell — and the final section is what you'll need when you do.

When you buy

• Contract of sale and the settlement statement — these set your cost base and the date you acquired the property.
• Stamp duty, legal and conveyancing fees, building and pest inspections — capital costs that form part of the cost base.
• Loan documents and a record of borrowing costs: establishment fees, mortgage stamp duty, valuation fees, lender's mortgage insurance, broker fees. If they total more than $100 they're claimed over five years or the loan term, whichever is shorter.
• Title details showing how the property is owned — joint tenants or tenants in common and in what shares.
• Depreciation schedule from a quantity surveyor, if you obtain one (see below).

Every year

• Property manager's annual statement — rent received, management fees, advertising, repairs paid on your behalf.
• Rent received directly from tenants, including bond money retained.
• Loan statements for the full year showing interest charged. If the loan was redrawn for private purposes, tell us — only the investment share of interest is deductible.
• Council rates, water rates, land tax and body corporate levies (administration fund levies are deductible; special levies for capital works usually aren't).
• Insurance — landlord and building policies.
• Repairs and maintenance invoices, with a note of what was done and why.
• Other costs — pest control, gardening, cleaning, smoke-alarm servicing, bank fees on the rental account, accounting fees.
• Periods of private use or when the property was not genuinely available for rent — dates, so expenses can be apportioned.

Repairs vs improvements

A repair restores something to its previous condition after wear or damage that occurred while the property was rented — fixing a leaking tap, replacing broken tiles, repainting worn walls. It's deductible in the year you pay it. An improvement makes something better than it was, adds something new, or changes its character — a new kitchen, extending a deck, replacing a fence with a better one. Improvements are capital: structural work is claimed at 2.5% a year as capital works, and new appliances or fittings are depreciated. Initial repairs to defects that existed when you bought are also capital. When in doubt, keep the invoice and a photo and let us classify it.

Depreciation and capital works

• Capital works — the building and structural improvements are generally claimed at 2.5% a year over 40 years for residential property built after 15 September 1987. If you don't know the construction cost, a quantity surveyor's estimate is accepted and the fee is deductible.
• New depreciating assets you buy for the property — ovens, carpets, blinds, hot-water systems — with the invoice and installation date.
• Second-hand assets that came with a property bought after 7:30 pm on 9 May 2017 generally can't be depreciated by individual investors (unless they were installed before 1 July 2017). Keep the schedule anyway — the undeducted value matters for CGT.

Rules that catch people out

• Travel to inspect, maintain or collect rent for a residential rental is not deductible since 1 July 2017 for individual investors.
• Co-owners split income and expenses by their legal interest — 50/50 for joint tenants, or the title percentages for tenants in common — regardless of who paid.
• Apportion expenses where the property was used privately, rented to family below market rent, or only partly rented.
• Interest on money redrawn for a car or holiday is private, even if the loan is secured on the rental.

When you sell — CGT records

• The sale contract and settlement statement, agent's commission, advertising and legal fees.
• Your purchase records (above) and every capital cost since — improvements, and the capital works you've claimed, which reduce the cost base.
• Dates of any period you lived in the property, for a partial main-residence exemption.
• Keep CGT records for at least five years after the year the sale happens.

Changes from 1 July 2027

Legislation passed in June 2026 changes two long-standing rules from 1 July 2027. Negative gearing on residential property is limited to new builds, and the 50% CGT discount for individuals, trusts and partnerships is replaced by cost-base indexation together with a 30% minimum tax rate on capital gains. Properties held at 7:30 pm AEST on 12 May 2026 are exempt from the negative gearing change, and the CGT change applies to gains that accrue after 1 July 2027. A discount of at least 50% continues to be available where the gain relates to a new residential dwelling or the provision of affordable housing. The transitional detail is technical and depends on when you bought, so please get advice before buying, selling or restructuring.