Keeping proper records of the income you derive from an investment property is necessary to accurately measure your total assessable income for any given financial year.

Rental income includes the following forms of revenue:

• Rent payments from tenants
• Bond money that are retained for any given reason
• Insurance payments for lost rental income, or reimbursement of rental expenses

When it comes to claimable deductions, this part can get quite messy as the legislation outlines different treatments for different categories of expenses.

However the general rule is that you can make a claim for any reasonable expenses that arose during a period that the property was being rented or was available for rent, importantly though this does not include expenses that are capital or private in nature.

There are several categories of expenses that can’t be claimed as valid deductions. Some of these may seem like common sense, however we’ve seen a great number of clients try to make similar claims, only to be penalised by the ATO, if you’re unsure if you can claim a certain expense, please talk to a tax accountant.

Here are some examples of expenses that can not be claimed as deductions:

• Expenses related to the private use of a property, such as using it as holiday home
• Expenses not incurred by you, such as utilities that your tenants paid
• Marketing costs related to acquiring or disposing of your property