Landscaping on a Rental Property: Is it Tax Deductible?

Would you consider “landscaping” on your rental property as general maintenance duty or the act of making your rental property more appealing to a leasee or a potential buyer? If your answer was the latter, then you’re right!

Landscaping your rental property is generalized to being the planning, laying out and construction of gardens that enhance the appearance of your property according to the Landscaping Network website. With this generalization, the Australian Tax Office (ATO) does not allow for the immediate deductions of improvements done on rental properties. According to the ATO’s Guide for Rental Property Owners 2020, “landscaping” is considered to be an improvement on your property and does not fall into the category of repairs and maintenance as an expense which are deductible in the year in which you incur them.

Whilst the costs of landscaping are not immediately deductible, they do however form part of the cost base when you decide to sell your rental property or cease to own the property. It is critical that your retain any or all receipts in relation to any landscaping work done on your property as this makes it easier in determining exactly what the total cost of your property is before you dispose of the rental. Having the cost of your property as high as possible helps to decrease the gain you receive on the sale of the property as any gain you receive from selling your rental property does form as part of your assessable income for that income year.