Are Property Management Fees and Landlord Insurance Tax Deductible in Australia?
Property management fees and landlord insurance are generally deductible rental expenses in Australia. How the deduction works and what changes in 2027.
Are property management fees and landlord insurance tax deductible in Australia?
Generally, yes. Property management fees and landlord insurance premiums are both ordinary costs of earning rental income, and the Australian Taxation Office treats the costs of earning rental income — “rental expenses” — as deductible against your rental income, for the year you incur them, provided the property is genuinely rented out or genuinely available for rent for that period. The ATO’s Rental properties guide states the underlying principle this way: “you may be able to claim a deduction for the full amount of rental expenses against your rental and other income (such as salary, wages or business income) when you complete your tax return for the relevant income year.”
That’s the short answer. The size of the deduction, and what happens if your expenses exceed your rental income, depends on a few moving parts — including a change that starts reshaping the negative gearing side of this from 1 July 2027. Tax outcomes depend on your circumstances — speak with a registered tax agent before acting.
What is a “property management fee”, and is the whole amount deductible?
A property management fee is what you pay a real estate agent to manage a rental on your behalf — collecting rent, arranging repairs, handling inspections and communicating with tenants — usually charged as a percentage of the weekly rent, plus a separate “letting fee” when the agent finds a new tenant. There’s no government-set rate: the Queensland Government’s guidance on property management fees notes only that “all management fees and charges should be agreed first, then put in writing”, and Consumer Protection WA is blunter still: “Fees charged can vary substantially from agency to agency and are fully negotiable, so it is wise to shop around for the best deal.” Consumer Affairs Victoria says the same — everything except fees fixed by law is negotiable.
What agents actually charge varies by state and by whether the property is metro or regional. The Real Estate Institute of Queensland (REIQ) — an industry body, not a government source — publishes the following averages as a percentage of weekly rent:
| State/territory | Metro average | Regional average |
|---|---|---|
| QLD | 9% | 7–12% |
| NSW | 5–8% | 5–12% |
| VIC | 5–10% | 6% |
| SA | 9–15% | 9–11% |
| TAS | 5–10% | 5–10% |
| WA | 8.5–11% | 11%+ |
| NT | 5–10% | 5–10% |
| ACT | 6–8% | 8%+ |
Across that table, REIQ’s figures run from about 5% up to 15% of rent (the top of South Australia’s metro range), with most states clustering in the roughly 5–11% band, plus the separate letting fee. Because these figures come from an industry body rather than the ATO or a state consumer regulator, treat them as a guide to what agents commonly charge — not as a government-endorsed benchmark, and not as a statement about deductibility (which is a separate question, covered above). Whatever an agent genuinely charges you to manage a property that’s rented or available for rent counts toward your rental expenses.
What does landlord insurance actually cover, and do I have to have it?
Landlord insurance isn’t a legal requirement — it’s an optional add-on that sits alongside, not instead of, your standard building and contents cover. There’s no single Commonwealth definition of “landlord insurance” as a general product, but the closest official description sits in the ASIC Regulations 2001 (reg 12G), which — for the specific purpose of the deferred-sales-model rules that apply when this kind of cover is sold as an add-on to another purchase — describes an “add-on landlord insurance product” as one that provides cover for “loss of, or damage to, real property leased by the insured person to another person” or for “financial loss, including loss of rental income, relating to a lease of real property by the insured person to another person”, and that is “commonly regarded as landlord insurance”. In plain terms: damage a tenant causes to the property, and income you lose because the property can’t be rented out as planned. Individual insurers commonly market extras on top of that core scope — public liability cover and malicious-damage cover are common inclusions — but exactly what’s bundled in, and any liability limits, vary policy to policy, so check the product disclosure statement for the specific inclusions rather than assuming every landlord policy is identical.
No government body publishes a typical premium figure for landlord insurance — Moneysmart lists it only as one line item among the ongoing costs of owning an investment property, with no dollar range attached. As with property management fees, the genuine premium you pay for a policy covering a property that’s rented or available for rent is a rental expense in the same way. (Separately, a lender or a strata/owners corporation scheme may require its own building-insurance arrangements — that’s a different, non-landlord-specific obligation, not part of this discussion.)
How does this feed into negative gearing?
Negative gearing is what happens when the total deductible costs of holding a rental property — including loan interest, and the management fees and insurance covered above — add up to more than the rental income the property produces. As the ATO puts it: “Negative gearing occurs when you buy a rental property with the assistance of borrowed funds and the rental income is less than the deductible expenses (including interest on the borrowings). The tax result of negatively gearing a property is that a net rental loss arises.”
Under current law — for the 2026-27 income year, as at July 2026 — that net rental loss can generally be claimed in full against your other income, such as salary or wages, in the same tax return. If your other income isn’t enough to absorb the loss, you can carry the unused amount forward to a future year. There’s no general dollar cap on this deduction and no rule quarantining it to rental income only, under the law as it stands today. Ordinary limits still apply before you get to that point — expenses have to be apportioned if the property was used privately for part of the year or rented below market rent to family, for example — but those limits narrow what counts as a deductible expense in the first place; they don’t cap the loss that results once the expenses are worked out.
Does this change from 1 July 2027?
Yes, for new arrangements. Legislation assented to on 26 June 2026 (Act No. 49 of 2026) inserts a new provision, section 26-155 of the Income Tax Assessment Act 1997, that quarantines residential rental deductions from the 2027-28 income year onward: where those deductions exceed residential rental income, the excess will no longer be deductible against other income like salary. Instead, it becomes a “quarantined amount” that is first applied against your capital gains for that income year under the ordinary net-capital-gain calculation (not limited to gains on residential property specifically) and, to the extent any of it remains, carried forward against future residential rental income. This is an entirely separate reform from the 1 July 2027 changes to the Capital Gains Tax discount — the two start on the same date but are different regimes, and shouldn’t be conflated.
Two things matter if this affects you. First, grandfathering: interests acquired before 7:30pm AEST on 12 May 2026 keep the current treatment described above, so whether this applies to a given property can turn on exactly when the contract was entered into. Second, new residential dwellings are meant to be carved out of the quarantine — but as at July 2026, the government hasn’t yet published the legal instrument that defines what counts as a “new” dwelling for this purpose, so exactly which properties will qualify for that carve-out isn’t settled.
Widely held unit trusts and complying superannuation funds are exempt from the quarantine regardless. Tax outcomes depend on your circumstances — speak with a registered tax agent before acting, particularly if you’re weighing the timing of a purchase against this cut-off.
Does the ownership structure I use change any of this?
The day-to-day deductibility of running costs like property management fees and landlord insurance follows the same general rental-expense rules whether you hold a property individually, through a company, through a discretionary or family trust, or through a self-managed super fund (SMSF). What differs by structure is what happens to the overall tax result:
- Individual — you’re assessed on the net rental result at your own marginal tax rate, and if you hold the property at least 12 months you may access the 50% CGT discount on eventual sale.
- Company — the company is taxed in its own right rather than passing profits or losses straight through to you, and companies don’t have access to the general 50% CGT discount.
- Discretionary/family trust — trust income is generally taxed in the hands of the beneficiaries who are presently entitled to it, in proportion to their entitlement, and an eligible trust can still access the 50% CGT discount.
- SMSF — subject to superannuation-specific rules (the sole purpose test, in-house asset limits, and related-party restrictions) that don’t apply to the other three structures, taxed at a concessional 15% fund rate with a one-third CGT discount for eligible assets. Moneysmart notes that within an SMSF, “tax losses cannot be offset against income outside the SMSF” — a materially different position from the negative gearing treatment described above, which assumes an individual (or another entity with outside income to offset against).
No ATO or Moneysmart page ranks these structures against each other, and this isn’t a decision to make from a blog post — asset protection, family law exposure, set-up and running costs, and your personal tax position all factor in differently depending on the structure. Superannuation rules are complex and penalties for breaches are significant — seek advice from a licensed financial adviser before making SMSF decisions, and speak with a registered tax agent about which structure suits your circumstances more broadly.
So, are these costs deductible?
Yes — property management fees and landlord insurance are both rental expenses in the ordinary sense the ATO uses that term, deductible against your rental income for the period the property is rented or genuinely available for rent, on the same general footing as loan interest. Whether that deduction ends up reducing your overall tax bill, creating a net rental loss, and what happens to that loss, depends on your income, your ownership structure, and — for anything acquired from mid-2026 onward — the 1 July 2027 quarantine described above.
For how these running costs fit into the bigger picture of what property investment involves, see our guide to what property investment is and how it works in Australia. And if you’re weighing whether a property is likely to be cash flow positive or negatively geared once costs like these are counted, see our guide to cash flow positive vs negatively geared property.
