Special Rental Taxes
Introducing the renters calculator
These require additional administration
Complicated, confusing taxes, only for rental businesses, require special, skilled professional services for presenting additional information.
These rental taxes caused a flood of rental property sales, They forced up rents that added to inflation. Rental shortages exploded forcing huge government costs for emergency accommodation.
Three taxes imposes on rental properties
1) "Interest" Tax 2024
Compared with other businesses, rental owners can only claim half their interest payments as a deductible expense. This adds around $44 weekly cost for every $200k borrowed from banks.In year end 2025 interest tax will reduce to around $18 weekly and will be gone from 2027. (This tax does not apply to new builds)
2) "Ring Fencing" Tax
Unlike other businesses, losses from renting houses cannot be used to offset other taxable incomes. For every $100 weekly taxable income loss, this tax adds to costs around $30pw.
Notes
Owners with more than one residential property may combine their properties as "portfolios". These might help reduce this tax.Taxable losses can be accumulated to off-set any future taxable profits.
Guidance and advice from experienced professionals is always strongly recommended.
3) "Capital Gains" Tax (from 2025)
If properties are sold within 2 years of purchase, this tax applies to any profit made from the trade
See rentagain XL calculator to view the likely amounts of tax and other costs your rental property may be facing weekly.