Property investors in Queensland

The cost of holding the property

Interest follows what the borrowed money was used for, not which property secures the loan. Borrow against your rental to buy a car or your next home and the interest on that part is private. Redraw from an investment loan for something personal and you apportion the interest for the rest of the loan's life.

Rates, insurance, regular body corporate fees and agent's fees are claimed in the year you incur them, for the time the property is rented or available for rent on commercial terms. A special levy raised to fund a capital improvement is claimed as capital works instead. If you paint the place yourself, the paint is deductible and your weekend is not.

Repairs or improvements

A repair fixes wear or damage that happened while the property was rented, and you claim it straight away. An improvement makes something better or changes its character, and goes into capital works. The ATO's own example is a fibro wall damaged by tenants: replace it with plasterboard and it is a repair, replace it with a brick feature wall and it is not.

Fixing defects that were there when you bought is an initial repair and is capital, even if you did not know about them. Replacing a whole item, such as an entire toilet or every kitchen cupboard, is also capital. When one job mixes both, ask for an itemised invoice.

The building and what is in it

For a residential building whose construction started after 15 September 1987, the capital works deduction is generally 2.5% of the original construction cost a year, for 40 years from completion. That is not your purchase price. A quantity surveyor can estimate it, and their fee is deductible.

Carpets, ovens and air conditioners are depreciating assets, and the purchase date matters. If you bought a residential rental at or after 7:30pm on 9 May 2017, you generally cannot depreciate the fittings that came with an established property. You can depreciate items you buy new yourself, and the fittings in a brand-new or substantially renovated property, provided nobody has claimed depreciation on them and either nobody lived there first or you bought within six months of completion.

Negative gearing and the May 2026 cut-off

A property is negatively geared when its deductible costs exceed the rent. Today an individual can offset that loss against salary or business income.

The law changed for purchases made after 7:30pm AEST on 12 May 2026. From 1 July 2027, a loss on an established residential property bought after that moment can only be used against residential property income, including capital gains, with any excess carried forward. A property you already held, or had signed a contract for, keeps the current treatment until you sell it. New builds can still be negatively geared.

Queensland land tax

Land tax is charged on the land value set by the Valuer-General, across everything you own at midnight on 30 June. The taxable value is the lower of the current valuation and a three-year average. The land under your own home can be exempt, but you have to apply for that.

An individual pays nothing until the total taxable value of their Queensland land reaches $600,000. Companies and trustees, including a family trust or an SMSF, have a $350,000 threshold, and each owner is assessed on its own holdings. So land split between your own name and a trust can leave the trust with a bill and you with none.

When you sell

Capital gains tax runs off the contract date, not settlement, so a contract signed on 28 June falls in that financial year. Australian resident individuals and trusts who owned the property for at least 12 months halve the gain. Capital works deductions you could claim are left out of the cost base.

From 1 July 2027 the 50% discount is replaced for individuals, trusts and partnerships by indexing the cost base to inflation, with a minimum tax rate of 30% on gains. Growth up to that date keeps the discount, so you will need a value for the property at 1 July 2027. That can come from a valuation or from a set apportionment formula, and the ATO is to publish tools for the formula.

A former home and the six-year rule

Your home is generally exempt from capital gains tax. Move out and rent it, and you can keep treating it as your main residence for up to six years in each absence, provided you claim no other main residence in that time, apart from a six-month overlap when moving house.

It has to have been your home first. And a foreign resident on the day the sale contract is signed generally cannot claim the exemption at all, which catches people who move to New Zealand and sell the Brisbane house later. If that is your plan, see our Australia–New Zealand tax work.

Choosing who owns the next one

Co-owners split rent and deductions by their legal interest on the title, whatever they agree between themselves. Joint tenants split 50:50, so the higher earner only takes more of the loss if the title gives them a bigger share.

A family trust can share income and gains among beneficiaries but cannot pass a loss out. The loss stays in the trust and can only be used against its own later income, subject to the trust loss rules. Trusts and companies also get the lower land tax threshold, and a company gets no capital gains discount.

Which of these bites depends on whose income the loss would otherwise sit against, whether you will hold past 1 July 2027, and what land you already hold in each name. Moving a property to another owner is a transfer, with Queensland duty usually on market value even within a family, and possibly capital gains tax. Decide the owner with your lender and solicitor before you sign the contract, because once the title is settled the rent, the loss and the land tax all follow it.

Before we meet

The Rental Property Checklist on our Resources page lists what to gather for each property. Investment property deductions covers the claims in more detail. Then get in touch or fill in the new client form.