Buying guide
Interest deductibility on rental property explained
The laws are changing so we’ve got up to date answers to make life easier.
AI summary
The government is reintroducing interest deductibility for landlords, allowing them to deduct mortgage interest costs from rental income to lower their taxable income. This reverses the previous government's phase-out policy.
The new rules are being phased in:
- 2023/24 tax year: 60% deductible
- 2024/25 tax year: 80% deductible
- 2025/26 tax year: 100% deductible
Additionally, the bright-line test has been shortened to two years. Property investors should consult a tax accountant to navigate these changes effectively.
But first, what is interest deductibility on rental property?
Current rules — what's deductible now?
There are tax advantages to owning a new build property.
Other changes for investors to note
Should I be doing anything now?
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