EOFY 2026 Property Investor Tax Checklist: What to Do Before 30 June

Overview

Australia's 2025-26 financial year ends on 30 June 2026. As of now, that's roughly ten weeks away. For property investors, the window between mid-April and end-June is where a few deliberate moves can shift thousands of dollars of tax between financial years.

This is a plain-English walkthrough of what the ATO's rules actually say, where the common traps sit, and the four moves that usually pay off for negatively-geared investors before 30 June. It is general information, not tax advice — specifics still need to go through a registered tax agent.

Deductions you can claim this year

Rental property deductions fall into three buckets.

1. Borrowing and finance costs. Interest on the investment loan is the big one. Also in the bucket: loan establishment fees and valuation fees (borrowing costs amortised over the life of the loan, up to five years), and LMI (apportioned over five years from the loan drawdown date).

2. Operating costs. Council rates, water and land tax; body corporate fees (the ongoing ones, not special capital levies); property management fees, letting fees and advertising; insurance; accounting fees for the property; pest, cleaning, gardening. Repairs and maintenance are deductible in the year you pay them — but only if they're restoring the property to its original condition. Anything that improves it beyond original is capital, not expense.

One important limitation: since 1 July 2017, individuals cannot claim travel costs for inspecting or maintaining a residential rental property. If you flew to Hobart to check on your investment, that's no longer deductible. The ban does not apply to genuine property businesses or to commercial property, but it catches most mum-and-dad investors.

3. Depreciation — the paper deduction. This is the one most investors under-claim.

• Division 43 (capital works): 2.5% of the building construction cost per year for 40 years. Applies to residential property with construction commencing after 15 September 1987.
• Division 40 (plant and equipment): Depreciation on removable items — carpets, blinds, air conditioning, appliances — at ATO-set rates. Since 9 May 2017 the rule changed: you can only claim Division 40 on items you purchased new, not on items that came with a pre-owned property.

A Quantity Surveyor's depreciation schedule typically costs $400 to $800, is itself tax-deductible, and often unlocks $5,000 to $15,000 in first-year deductions on a recent-build property. Model your own scenario with our Negative Gearing Calculator and see the Property Depreciation Guide for the detail.

Four moves before 30 June that reduce your 2025-26 tax

Move 1: Prepay up to 12 months of interest

For individual investors (not businesses), you can prepay interest for a period up to 12 months and claim the whole prepayment in the current financial year — provided the prepaid period ends on or before 30 June 2027.

Worked example: on a $500,000 investment loan at 6%, 12 months of interest is roughly $30,000. At a 37% marginal tax rate, prepaying this year pulls $11,100 of tax benefit into the 2025-26 return instead of next year's.

Three things to watch before you do this:

• Not every loan product accepts prepayments. Offset and redraw loans often can't be prepaid — you typically need a fixed-rate product.
• You need the cash buffer. The prepayment is a real cash outflow, not just an accounting move.
• It locks the interest rate for the prepaid period. If rates fall, you don't benefit from the cut on the prepaid portion.

Move 2: Bring forward genuine repairs

There's a hard line between "repair" and "improvement" in ATO rules, and it changes the deductibility entirely:

• Repair: restoring something to its previous condition (re-painting, fixing a broken tap, patching a roof leak). Fully deductible in the year paid.
• Improvement: upgrading beyond original (new kitchen, extension, upgraded flooring throughout). Capital works — depreciated over 40 years, or added to the cost base for CGT purposes.

If you have a genuine repair on the list, scheduling it for May or June pulls the deduction forward a full year versus July or August. Get the invoice dated before 30 June.

Move 3: Get a depreciation schedule if you don't have one

If the property is newer than about 40 years old (for Division 43), or you've purchased brand-new Division 40 assets during your ownership, a Quantity Surveyor report usually pays for itself many times over — and the QS fee is deductible.

Depreciation is a paper deduction. You claim it without spending.

Move 4: Time the sale side

If you're selling an investment property, the date that determines which financial year the capital gain lands in is the contract date, not the settlement date.

With the 50% CGT discount (for properties held more than 12 months) and the post-Stage-3 tax brackets, a $200,000 gain on a property held long enough becomes a $100,000 taxable amount. At the 45% top marginal rate that is $45,000 of tax — so timing matters.

• Defer the sale to the next financial year if: your income next year will be lower, or you expect offsetting capital losses.
• Bring the sale forward if: your income next year will be higher, or you already have current-year capital losses on other assets.

Model the numbers both ways with our Capital Gains Tax Calculator.

What not to forget — the trap list

These catch investors every year:

1. Special body corporate levies for capital works are capital. They're depreciated over 40 years via Division 43, not deducted in the year paid. Ordinary quarterly strata fees are still a regular expense.
2. Pre-purchase repairs are not immediately deductible. Fixing things that were already broken when you bought the property counts as getting the property ready for rental — capital, not expense.
3. Off-the-plan construction costs don't become Division 43 until the property is available for rent. The clock starts at availability, not at contract.
4. Principal repayments are never deductible. Only the interest component is. On a P&I loan, the split moves over time — check your lender's annual statement.
5. PPOR council rates are not deductible. Only the investment portion counts. If you own multiple properties with mixed use, keep rates separate.

Don't wait for tax time — use a PAYG variation

If you're negatively geared and waiting until October-November to get your refund, you're giving the ATO an interest-free loan for 16+ months.

The fix is a PAYG Income Tax Withholding Variation (ATO form NAT 2036). You estimate your expected deductions, the ATO reviews, and then tells your employer to withhold less tax from each pay cycle. The in-year benefit usually lands within 2-4 weeks of approval.

Most tax agents will lodge this for you annually. If your deductions change materially (rate rise, new property, major repair) you can re-lodge during the year.

The bottom line

Most EOFY mistakes for investors are timing errors rather than big oversights: prepayments structured wrong, "repairs" that were actually capital improvements, depreciation left on the table, or CGT events accidentally straddling the wrong financial year.

With roughly ten weeks until 30 June, there is still time to order an outstanding depreciation schedule, make deliberate decisions about prepayments and repairs, and line up records. The rest can wait for your tax agent.

---

Model your scenarios: Negative Gearing Calculator · Capital Gains Tax Calculator · Investment Property Yield Calculator · Income Tax Calculator.

Further reading: Investment Property Tax in Australia (2026) · Property Depreciation Guide · Negative Gearing Explained.

Sources: Australian Taxation Office — Rental properties guide; Division 43 capital works deductions; Division 40 plant and equipment rules; CGT 50% discount; PAYG withholding variation (NAT 2036). This article is general information — it is not tax advice. Verify specifics with a registered tax agent.