Borrowing expenses you can’t claim

You can’t claim any of the following as borrowing expenses:

the amount you borrow for the property

loan balances for the property

interest expenses (as these are claimed separately)

repayments of principal against the loan balance

stamp duty charged by your state or territory government on the transfer (purchase) of the property title (as this is a capital expense)

legal expenses including solicitors’ and conveyancers’ fees for the purchase of the property (as this is a capital expense)

stamp duty you incur when you acquire a leasehold interest in property such as an Australian Capital Territory 99-year crown lease (but you may be able to claim this as a lease document expense)

insurance premiums where, under the policy, your loan will be paid out in the event that you die, become disabled or unemployed (as this is a private expense)

borrowing expenses on any portion of the loan you use for private purposes (for example, money you use to buy a car).

You may be able to include capital expenses in the ‘cost base’ of your property. This can help you reduce the amount of capital gains tax (CGT) you pay when you sell your property. Expenses you incur when purchasing and selling your rental property are capital expenses.