Maintaining thorough records of your rental income and expenses is crucial for tax purposes when you eventually sell an investment property, and is a legal requirement in Victoria. As of December 2025, the Australian Taxation Office (ATO) expects landlords to demonstrate all income and allowable deductions.
Currently in Melbourne, particularly within the Eastern Suburbs where investment properties are common, sellers often realise the importance of these records during the capital gains tax (CGT) calculation process. Records should include all rental income received, detailed receipts for property expenses (like maintenance, rates, insurance, and property management fees – typically around 1.5-2.5% of the annual rent), and depreciation schedules. Fletchers’ experience shows that well-organised records can significantly impact the final CGT liability. Many clients utilise property management software, or engage a quantity surveyor to prepare a depreciation schedule. In 2026, we anticipate increased scrutiny from the ATO regarding expense claims, so detailed documentation is more important than ever. It’s also worth noting that records must be kept for five years after you dispose of the property.
Comprehensive record-keeping simplifies the tax implications of selling and ensures a smoother transaction process.