OzLedger - Accountants & Tax Agents

14/05/2026

Federal Budget 2026–27 Update
Important Changes for Property Investors

The Federal Government has announced proposed changes to negative gearing and Capital Gains Tax (CGT) as part of the 2026–27 Budget.

Negative Gearing Changes

Under the proposed rules:

Investors who purchase an existing residential property after 7:30pm on 12 May 2026 can still claim negative gearing deductions under the current rules until 30 June 2027.

From 1 July 2027, rental losses from these properties will generally no longer be deductible against salary or other income.

Instead, those losses may only be used against future residential rental income or capital gains.

Newly built properties are expected to continue qualifying for negative gearing benefits.

Existing investment properties owned before Budget night are expected to be protected under grandfathering provisions.

25/04/2026

Why should I use OzLedger instead of lodging myself?

Doing your own tax return through myGov is an option — but it comes with risks. You might miss deductions you're entitled to, or make errors that trigger an ATO review.

Our team finds things most people miss, and we can represent you if the ATO ever comes knocking.

For most clients, what we save them more than covers our fees.

25/04/2026

What do I need to bring to get started?

Not as much as you'd think. For most individuals, we'll just need your income statements, receipts for any deductions, and details of any investments or rental properties.

We'll give you a clear checklist once we've had an initial chat.

25/04/2026

Why should I use OzLedger instead of lodging myself?

Doing your own tax return through myGov is an option — but it comes with risks. You might miss deductions you're entitled to, or make errors that trigger an ATO review.

Our team finds things most people miss, and we can represent you if the ATO ever comes knocking.

For most clients, what we save them more than covers our fees.

Send a message to learn more

21/03/2026

Do rental property investors need tenants before claiming construction interest?

No. You don’t need tenants yet, but you must have a clear intention to earn rental income once the property is completed.

Send a message to learn more

21/03/2026

What interest can investors claim during the construction of a rental property?

Investors may claim interest related to constructing the dwelling, but not the portion of interest that relates to purchasing the land. Proper apportionment is required.

Send a message to learn more

21/03/2026

Is interest on vacant land tax deductible for investment properties?

Generally no. Interest on loans used to buy vacant land is usually not deductible until the property is lawfully able to be occupied and rented or genuinely available for rent.

Send a message to learn more

21/03/2026

Can rental property investors claim interest on construction loans?

Yes. Rental property investors may be able to claim interest on construction loans for an investment property, even while it is being built, provided the intention is to rent the property once construction is completed.

Send a message to learn more

12/03/2026

Refinancing an Investment Property Loan – What Happens to LMI?

If you refinance your investment property loan with another bank, you may be able to claim an immediate tax deduction for the remaining Lenders Mortgage Insurance (LMI) paid on the original loan.

Normally, LMI is treated as a borrowing cost and must be claimed over 5 years or the life of the loan (whichever is shorter).

However, when you refinance, the original loan is paid off early. When this happens, the remaining undeducted LMI amount can usually be claimed in full in the year the loan is closed.

In simple terms:

- LMI is usually claimed over time.
- If you refinance and pay off the original loan early, the remaining LMI may become fully deductible in that year.

This can provide a useful tax deduction when refinancing an investment property loan.

Always check with your tax adviser to confirm how this applies to your situation.

12/03/2026

When you refinance your investment property loan with a different bank, can you claim an immediate tax deduction for the LMI paid to the previous bank on the original loan?

Yes, when you refinance an investment property loan, you can claim an immediate deduction for the remaining undeducted balance of the Lenders Mortgage Insurance (LMI) paid on the original loan. This is because refinancing involves paying out the original loan, which triggers the immediate deductibility of the remaining borrowing costs associated with it.

The General Treatment of Lenders Mortgage Insurance (LMI)
LMI is considered a borrowing expense. While it is capital in nature and not deductible under the general deduction provision of section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997), it is deductible under section 25-25 of the ITAA 1997.

Apportionment Rule (s 25-25 ITAA 1997)
- Expenditure incurred in borrowing money for an income-producing purpose is deductible under section 25-25.
- LMI is a recognised borrowing cost under this section.
- If the total borrowing expenses (including LMI) exceed $100, the deduction must be spread over the lesser of five years or the term of the loan.

The Effect of Refinancing on Undeducted LMI
When you refinance your investment property loan, you are effectively repaying the original loan in full. This event changes the calculation for the deductibility of the remaining borrowing costs.

Immediate Deduction on Repayment
- According to the Australian Taxation Office (ATO), when a loan is refinanced, and the LMI policy associated with that original loan is no longer required, the full undeducted premium becomes deductible in the year the loan is repaid.
- The reasoning is based on how the "period of the loan" is defined for the apportionment calculation. When a loan is repaid early (i.e., before the end of its original term or the five-year apportionment period), the period of the loan for tax purposes ends on the day of repayment.
- This allows the entire remaining balance of the borrowing expenses to be claimed in that final income year.

This principle is demonstrated in ATO ID 2002/173 (Withdrawn), where a taxpayer refinanced an investment property loan in the third year. The ATO's decision was that a deduction was allowable for all of the undeducted LMI premium in the year of refinancing because the original loan had been paid out.

08/03/2026

📢 Small Business Owners: What You Need to Know About the $20,000 Instant Asset Write-Off

Thinking about upgrading your equipment? Now is the perfect time!

The $20,000 Instant Asset Write-Off for small businesses is available for the 2025–26 financial year, and it’s a powerful way to lower your tax bill. 💰

Here’s a simple guide to how it works.

💡 What Is the $20,000 Instant Asset Write-Off?
This measure allows eligible small businesses to immediately deduct the full cost of assets purchased for the business — instead of depreciating them over several years.
You get the full tax benefit right away, helping with cash flow.

✅ Are You Eligible? (Checklist)
You can use the write-off if you meet all four of these conditions:

Business Turnover: Your aggregated annual turnover is less than $10 million.
Asset Cost: The cost of each individual asset is under $20,000.
Timing: The asset is first used (or installed ready for use) between 1 July 2025 and 30 June 2026.
Asset Type: Both new and second-hand assets qualify.

📌 Note: You must be using the simplified depreciation rules to claim this write-off.

🧾 GST Treatment — Important!
The $20,000 threshold depends on whether you are registered for GST:

Registered for GST:
Threshold is based on the GST-exclusive price.
➜ You can buy an asset up to $21,999 (incl. GST) and still claim it.

Not Registered for GST:
Threshold is based on the GST-inclusive price.
➜ The total cost must be under $20,000.

🧰💻 What Assets Can You Claim?
You can claim multiple assets, as long as each one is under $20,000.
Common examples include:

Tools & Machinery: drills, saws, pressure cleaners, concrete mixers
Office Equipment: computers, printers, desks, chairs, phone systems
Vehicles: utes, vans, and cars (car limit applies to passenger vehicles)
Furniture & Fittings: shelving, appliances, air‑conditioning units
Technology: off‑the‑shelf software

❓ What If an Asset Costs $20,000 or More?
You can still claim a tax deduction — just not immediately.
These assets are added to the small business pool and depreciated:

15% deduction in the first year
30% each year after

📝 How to Claim (3 Simple Steps)
Buy the Asset — keep your tax invoice.
Use the Asset — ensure it’s installed and ready for use before 30 June 2026.
Lodge Your Tax Return — claim it in the depreciation section of your 2025–26 tax return.

🔍 The Bottom Line
The $20,000 instant asset write-off helps you:
✔ invest in the tools your business needs
✔ improve cash flow
✔ get a tax deduction right away
With the 30 June 2026 deadline approaching, now is the time to plan any major purchases.

📣 Ready to upgrade your business?
Review your asset needs and make sure you keep proper records to maximise your claim this financial year.



Disclaimer: This is general information only. Tax laws may change. Refer to the Income Tax Assessment Act 1997 for detailed rules.