Tax Time for Property Investors: What to Claim, What to Review, and What the 2026 Tax Changes Mean for Your Next Move

Tax time is here again. And if you own an investment property, this year may feel a little different.

Yes, there are still the usual tax-time questions:

• What can I claim?
• What records do I need?
• Can I claim repairs?
• What about interest, depreciation, insurance and property management fees?

But in 2026, property investors are also dealing with a much bigger question:

What do the recent property tax changes mean for my next move?

With recent changes to negative gearing, capital gains tax and SMSF property borrowing, speaking to your accountant should not only be about what happened last financial year. It should also be about what may need to change in the year ahead and a chance to review your whole property position.

Quick answer: what should property investors review at tax time in 2026?

At tax time in 2026, property investors should review their rental income, deductible expenses, loan interest, repairs and maintenance, depreciation, holiday home usage, capital gains exposure, SMSF obligations, loan structure and how the new negative gearing and CGT rules may affect future investment decisions.

Common investment property deductions may include:

• loan interest
• property management fees
• council rates
• water rates
• landlord insurance
• building insurance
• repairs and maintenance
• depreciation
• body corporate fees
• land tax, where applicable
• advertising for tenants
• accounting fees

However, not every property expense is immediately deductible. Some costs may need to be depreciated, added to the cost base, apportioned for private use, or treated differently depending on your circumstances.

However, not every property expense is immediately deductible. Some costs may need to be depreciated, added to the cost base, apportioned for private use, or treated differently depending on your circumstances.

That is why tax time is not just about maximising your refund. For property investors, it is also about understanding what your numbers are telling you.

Why tax time feels different this year

For many Australian property investors, the 2026 tax season comes with more uncertainty than usual.

There are three big reasons for that.

First, the ATO continues to pay close attention to rental property claims, especially where investors make mistakes around repairs, interest deductions, private use, holiday homes and record-keeping.

Second, the 2026 Federal Budget introduced major changes to negative gearing and capital gains tax, which are intended to apply from 1 July 2027.

Third, the Labor–Greens deal has added another layer for SMSF property investors, with future residential borrowing through self-managed super funds expected to be restricted.

Put simply, investors are no longer asking only, “What can I claim this year?”

They are also asking:

• Should I still buy an investment property?
• Should I buy new or established?
• Should I sell before the rules change?
• Do I need a valuation?
• Is negative gearing still worth it?
• What happens if my property is inside an SMSF?
• Should I review my loan structure?
• Am I still on track for my long-term wealth goals?

These are bigger questions than your tax return alone can answer. But your tax return is a very good place to start.

As we have covered in previous tax planning updates, the best tax outcomes usually come from planning early, keeping good records and getting the right advice before major decisions are made — not after.

Related reading:

• How to Boost Your Tax Return: Ben & Julia’s Hot Tips
• 2024: The Golden Year of Tax Planning
• Maximise Your Returns: Mastering End-of-Year Tax Planning, HECS Hacks, Super Strategies, and More

Watch: Tax Trap Crackdown with Ben Kingsley, Julia Hartman and Danish Ahmed

In Episode 602 of The Property Couch (video above), released on 18 June 2026, Ben Kingsley was joined by tax experts Julia Hartman and Danish Ahmed to unpack some of the biggest tax questions property investors are asking this year.

In the episode, they cover:

• Holiday homes and the ATO crackdown
  What’s changed this year. What the ATO’s red, orange and green zones mean, and why personal use during peak rental periods can affect what you claim.
• What property investors can claim
  A practical look at rental property expenses, holding costs, management costs and why the purpose of the property matters.
• What counts as a “new build”
  Why off-the-plan apartments, knockdown rebuilds, duplex scenarios, vacant land builds and granny flats are not always as straightforward as they sound.
• Negative gearing as a deferred tax benefit
  Why negative gearing is not necessarily “gone”, but the timing and cash flow impact may change under the new rules.
• Capital gains, valuations and record-keeping
  Why investors may need to think carefully about valuation evidence, comparable sales and timing before making decisions.
• Why tax should not drive the investment decision
  A reminder that tax benefits can support a strategy, but they should never be the strategy.

If you own an investment property, a holiday home, or you are thinking about your next property move, this is a timely episode to listen to before lodging your return or making any major decisions. And if you are unsure on your next property move, whether to buy, sell, hold or optimise from here, Empower Wealth’s property plans can help you map out the numbers and make a more informed next move.

Common rental property tax mistakes to avoid

Investment property tax can look simple on the surface: rent comes in, expenses go out, and you claim what you can.

But the mistakes usually happen in the details.

Here are six common areas property investors should review carefully:

• Claiming improvements as repairs
  Repairs may be deductible, but upgrades or improvements may need to be depreciated or treated as capital costs.
• Not checking the purpose of the loan
  Interest deductibility depends on how the borrowed funds were used. If part of the loan or redraw was used for personal expenses, that portion may not be deductible.
• Forgetting to apportion expenses
  If the property was only rented for part of the year, used privately, or not genuinely available for rent, some expenses may need to be apportioned.
• Missing depreciation
  A depreciation schedule can help identify eligible capital works and plant and equipment deductions that may otherwise be missed.
• Poor record-keeping
  Keep clear records of rental income, loan statements, property expenses, repairs, insurance, depreciation, purchase costs and sale documents.
• Leaving tax planning until after a property is sold
  If you are thinking about selling, speak to your accountant before signing a contract. Once the sale is underway, your options may be more limited.

How the 2026 budget tax reforms affect property investors

The 2026 Federal Budget introduced major property tax changes, with the new rules intended to apply from 1 July 2027. Broadly speaking:

• negative gearing for residential property will be limited to new builds from 1 July 2027
• properties held before 7:30pm AEST on 12 May 2026 are expected to be exempt from the negative gearing changes
• new builds can continue to be negatively geared before and after 1 July 2027
• investors who buy established housing after 12 May 2026 may be able to deduct losses against other residential property income and capital gains, or carry forward excess losses to future years
• those losses may not be able to be deducted against non-residential income, such as wages
• the 50% CGT discount is set to be replaced with an inflation-based discount from 1 July 2027
• a minimum 30% tax rate on capital gains is also set to apply
• the new CGT arrangements are expected to apply to capital gains that accrue from 1 July 2027 when realised

That is a lot to take in. So let’s bring it back to what really matters.

Negative gearing is not the strategy

Negative gearing may support cash flow at a point in time, but it should never be the reason you buy a property.

The strategy should be based on the quality of the asset, the role it plays in your portfolio, your cash flow, your borrowing position, your risk profile and your long-term goals.

If a property only makes sense because of a tax deduction, that is a warning sign. Also, it’s important to note that the benefit may be deferred, not gone.

For a deeper dive on this topic, you may find these useful:

• Watch the video above
• Negative Gearing vs Deferred Tax Benefits Explained
• Moorr Negative Gearing Analysis Tool | New Property Feature

New build or established property?

First, let’s understand what is considered a new build. Julia shared this in the video above:

The new rules are designed to direct tax support towards new housing supply. That means some investors may be tempted to favour new builds purely because of the tax treatment.

But tax should not drive the investment decision.

A new build may offer certain tax advantages, but it still needs to stack up as an investment. Location, scarcity, land value, owner-occupier appeal, supply risk, rental demand, cash flow and long-term growth potential still matter.

Moorr’s Negative Gearing Analysis Tool can help you compare properties side by side and model how different assumptions may impact cash flow, tax benefits and long-term outcomes. Explore the tool here: https://www.moorr.com.au/negative-gearing-analysis-tool/

The key point?

Do not let the tax tail wag the investment dog.

Capital gains, valuations and record-keeping

The CGT changes also mean investors may need to keep better records, especially if they hold property before the new rules apply and need to understand how gains are calculated from 1 July 2027 onwards.

Property valuations can vary. Comparable sales can change. Different valuers can reach different conclusions.

That means evidence matters.

Investors should keep records of purchase contracts, settlement statements, stamp duty, improvement costs, depreciation schedules, valuation reports, comparable sales evidence, loan statements and sale documents.

If you are considering selling, refinancing, restructuring or changing the use of a property, it is worth getting advice early.

What about SMSF property?

SMSF property has also become part of the tax reform conversation, particularly following the Labor–Greens deal and the expected restrictions on future residential property borrowing through SMSFs.

If you already hold property inside your SMSF, or you are considering SMSF property, this is an area where personal advice is essential. You can learn more here: SMSF Property After the 2026 Federal Budget: What Investors Need to Know

How our tax team helped clients last financial year

At Empower Wealth, our tax team works with a wide range of clients every day, from individuals and families through to first-time property investors, experienced portfolio owners and SMSF trustees.

Our goal is not just to lodge your return.

It is to help you understand your tax position and how it fits into your broader financial picture. Here is a snapshot of our tax team’s recent results.

Every client’s situation is different, and these figures are not a guarantee of what you may receive.

But they do show the value of having the right records, advice and tax support in place.

And with our Maximum Refund Guarantee, you can have added confidence that your return is being reviewed thoroughly.

Need help with your property tax return?

Whether you’re lodging an individual tax return, managing investment income, claiming rental property deductions, or dealing with a holiday home, SMSF or property portfolio, our tax team can help you understand:

• what you may be able to claim
• what records you need
• how your loan structure may affect deductibility
• whether your holiday home deductions need review
• how the new tax rules may affect your next move
• whether you need support with an SMSF tax return
• how your tax position fits into your broader financial strategy

Tax time is not just about getting your return lodged. It is about making informed decisions with the right numbers in front of you.

If you would like help with your personal tax return, investment property tax return or SMSF return, book an initial consultation with Empower Wealth today. Request your free initial consultation here or via the form below.

Frequently asked questions

What can property investors claim at tax time in Australia?

Property investors may be able to claim expenses such as loan interest, property management fees, council rates, water rates, landlord insurance, building insurance, repairs and maintenance, depreciation, body corporate fees, land tax where applicable, advertising for tenants and accounting fees. The exact deductions depend on your circumstances, how the property was used and whether the expense is immediately deductible, depreciable or capital in nature.

Can I claim interest on my investment property loan?

You may generally be able to claim interest on money borrowed for an income-producing investment property. However, the purpose of the borrowed funds matters. If part of the loan or redraw was used for private purposes, that portion of the interest may not be deductible.

Are holiday home expenses tax deductible?

Holiday home expenses may be deductible where the property is genuinely available for rent and used to produce income. However, deductions may need to be apportioned where there is private use, blocked-out peak periods, non-commercial rental arrangements or limited availability. If you own a holiday home, speak to your accountant before lodging your return.

What is the difference between repairs and improvements?

This is a classic old time debate. Repairs generally restore something to its original condition after wear and tear from renting out the property. Improvements usually upgrade, replace or enhance the property beyond its original condition. Repairs may be immediately deductible, while improvements may need to be depreciated or treated as capital costs. You can watch our older tax blogs to understand this a bit deeper.

Do I need a valuation for capital gains tax?

You may need valuation evidence in certain situations, especially where the use of a property changes, a property is sold, or CGT rules require market value evidence. A registered valuation or well-documented comparable sales evidence may help support your position, depending on your circumstances.

Can Empower Wealth help with SMSF tax returns?

Yes. Empower Wealth can assist with SMSF tax returns, including SMSFs that hold investment property. SMSFs have separate tax, reporting, audit and compliance obligations, so it is important to make sure your fund records are complete and your strategy remains appropriate.

What is the Maximum Refund Guarantee?

Our Maximum Refund Guarantee is designed to give clients confidence that their tax return has been reviewed thoroughly and that eligible deductions have been considered based on the information provided. Every client’s situation is different, so the outcome will depend on your income, deductions, records and personal circumstances.

When should I speak to a tax accountant?

Ideally, before you make a major financial decision. If you are thinking about buying, selling, refinancing, renovating, changing the use of a property, setting up an SMSF, or restructuring your loans, it is worth speaking to a tax accountant early. Good tax planning usually happens before the decision is made, not after. Fill in the form below to lock in a free initial consultation with our tax team.