Determining tax-deductible property expenses in Victoria involves understanding which costs are directly related to earning income from the property, such as rental income if it’s an investment property. As of December 2025, these deductions can reduce your capital gains tax (CGT) liability when you sell.
When preparing a property for sale currently in Melbourne, several expenses may be tax deductible. These typically include advertising and marketing costs – a full campaign in the Eastern Suburbs can range from $3,000 to $8,000 – as well as agent’s commission, usually between 1.5% and 2.5% of the sale price. Costs associated with preparing the property, like professional photography ($500-$1,500) and styling ($2,000-$8,000), are generally *not* deductible at the time of sale, but may be if the property was previously rented. Legal fees incurred during the sale process are also deductible. It’s important to note that improvements, rather than repairs, generally add to the property’s cost base for CGT purposes, and aren’t immediately deductible. In 2026, with the market continuing to favour well-presented properties, these preparation costs are often significant. Fletchers’ experience shows that a strategic marketing campaign, tailored to the local area, is crucial for maximising sale price.
Accurately tracking and claiming eligible property expenses can significantly impact your tax obligations when selling, so maintaining detailed records is essential.