Last reviewed: May 2026 · Financial year: 2025–26 · Authority: Cross-referenced against ATO Rental Properties Guide 2025 (NAT 1729), RevenueSA published rates and rulings, and current draft TR 2025/D1.

TL;DR for SA investors in 2025–26:
- SA land tax kicks in at $763,000 (individuals). SA is the only state that indexes thresholds annually based on average changes in site values — most other states have frozen or static thresholds.
- Trust threshold is $25,000 with much lower thresholds and a separate trust surcharge regime introduced under the 2020 SA land tax reforms.
- No foreign land tax surcharge. SA does not impose one. Its foreign stamp duty surcharge is 7%.
- Stamp duty has progressive rates with no premium tier; foreign buyers pay an additional 7% on top of standard duty.
- Negative gearing remains legal and unrestricted in 2025–26.
- The ATO is data-matching loan redraws against tax returns through to 2025–26.

South Australia is a smaller investor market than the eastern states but has had strong growth since 2020 — Adelaide capital values are up materially, and the state's threshold approach (annual indexation) means investors have some protection from bracket creep that NSW, VIC, and TAS investors don't get.

This guide covers every legitimate deduction available to a South Australian property investor in 2025–26, the SA-specific rules that affect those claims, and the four ATO compliance traps to avoid before lodging.

Why South Australia is different

The SA-specific things that affect your return outcomes:

Annual threshold indexation. SA is the only state that adjusts its land tax thresholds annually based on average site value changes. Other states have frozen thresholds (NSW, VIC) or static thresholds. The 2025–26 individual threshold is $763,000, gazetted 5 June 2025.

Land tax assessment date is 30 June. Same as QLD and WA. Different from NSW/VIC (31 December) and TAS (1 July).

Trust regime overhauled in 2020. Trusts face significantly lower thresholds and tighter rules under the SA Land Tax (Miscellaneous) Amendment Act 2019 reforms.

No foreign land tax surcharge. SA, WA, and NT are the only Australian jurisdictions without one.

7% Foreign Stamp Duty Surcharge for foreign buyers of residential property. Note: as of 13 February 2025, stamp duty relief for first home buyers no longer extends to the foreign ownership surcharge.

These are the things that move the dial on a SA return. The federal deduction list is still the foundation.

Part 1: Common deductions every SA investor can claim

Threshold trajectory 2024–2029

SA's annual indexation vs frozen thresholds elsewhere

SA indexes thresholds annually with land value changes. NSW and VIC have frozen theirs. Over 5 years, the gap widens significantly.

What this means

SA is the only Australian state that adjusts thresholds annually. NSW (frozen at $1,075,000 until 2027) and VIC (frozen at $50,000) leave their thresholds static while land values rise — pulling more investors over the line each year. SA's threshold tracks land value movement, providing structural protection from bracket creep.

These deductions are governed by the Income Tax Assessment Act 1997 and the ATO's Rental Properties Guide 2025. The property must have been rented or genuinely available for rent during the period the expense was incurred.

1. Loan interest

Interest on the loan used to acquire your SA investment property is fully deductible — typically the largest deduction. Interest on loans for capital improvements is also deductible. Redraw for private purposes is the biggest trap (Part 4).

2. Property management fees

Adelaide metro PM fees typically run 7–9%. Regional SA varies. All recurring management fees, letting fees, advertising, and inspection charges are deductible.

3. Council rates

Local government rates from your SA council (City of Adelaide, Norwood Payneham St Peters, Burnside, Unley, Mitcham, Onkaparinga, Salisbury, Tea Tree Gully, Charles Sturt, Port Adelaide Enfield, etc.) are fully deductible.

4. Water rates and usage

SA Water charges include both supply and usage components. The supply charge is generally a landlord cost; usage typically passes to the tenant. Whatever the landlord pays is deductible.

5. Insurance premiums

Landlord, building, and contents insurance — all deductible. Premiums include stamp duty and GST — both components are deductible.

6. Repairs and maintenance

Repairs that restore the property to its previous condition without improving it are immediately deductible. The repair vs improvement distinction is heavily audited (Part 4).

7. Body corporate / strata fees

Quarterly admin fund and reserve fund (or sinking fund) contributions are immediately deductible. Special levies for ordinary maintenance are deductible. Special levies for capital improvements form part of your Division 43 base.

8. Land tax

SA land tax is fully deductible. Covered in detail in Part 2.

9. Advertising for tenants

Realestate.com.au listings, Domain listings, photography, signboards — all deductible.

10. Legal expenses

Deductible: evicting tenants, recovering unpaid rent, lease preparation in some circumstances. Not deductible — but added to CGT cost base: conveyancing, title disputes.

11. Stationery, phone, internet (rental portion)

Costs related to managing the rental are deductible to the extent they relate to producing rental income.

12. Quantity surveyor fees

Fully deductible. Covered in Part 3.

13. Tax agent fees (rental portion only)

Portion related to preparing the rental schedule is deductible.

14. Pest control

Routine pest control between tenancies and termite inspections are immediately deductible.

15. Cleaning and gardening

End-of-tenancy cleaning, routine cleaning, lawn mowing, gardening — all deductible.

16. Bank fees and loan costs

Loan establishment, valuation, and LMI are borrowing costs — deducted over 5 years or the loan term, whichever is less. Annual loan account-keeping fees and mortgage discharge expenses are immediately deductible.

17. Travel to property — heavily restricted

Non-deductible since 1 July 2017 for individual investors with residential property. Companies and trusts (other than excluded entities) are exempt.

For interstate investors who bought into the Adelaide growth cycle, this is a real restriction. There is no workaround for individuals other than holding through a corporate structure — which carries its own tax consequences.

Part 2: SA Land Tax — the rules that actually matter

2.1 Land tax

Levied by RevenueSA annually, based on the site value of SA land you own at midnight on 30 June. Your principal place of residence is exempt. Investment properties, holiday homes, and vacant land are all assessable.

2025–26 thresholds and rates (individuals — gazetted 5 June 2025)

Total taxable site value	Land tax payable
Up to $763,000	$0
$763,001 – $1,176,000	0.50% of value above $763,000
$1,176,001 – $1,711,000	$2,065 + 1.00% of value above $1,176,000
$1,711,001 – $2,422,000	$7,415 + 2.00% of value above $1,711,000
Above $2,422,000	$21,635 + 2.40% of value above $2,422,000

Source: RevenueSA published rates 2025–26, gazetted 5 June 2025.

The annual indexation gives SA investors more predictable cost growth — thresholds rise with land values rather than being eroded year on year.

2.2 Trust regime

The 2020 SA reforms (Land Tax (Miscellaneous) Amendment Act 2019) significantly tightened trust treatment. Land held in a discretionary trust generally faces:

Lower thresholds
A trust surcharge that can apply from the first dollar in some cases
Strict rules about beneficiary nomination

Trustees can nominate a designated beneficiary in some cases to access general rates, but the rules are strict and the windows are narrow. If you're considering a trust structure for SA investment property, take advice on the specific trust treatment under SA law before settlement — many investors who came from the eastern states find SA's trust regime more punitive than they expected.

2.3 No foreign owner land tax surcharge

SA does not impose a foreign owner surcharge on land tax. This is a genuine differentiator from most other states.

2.4 When are SA land tax assessments issued?

RevenueSA typically issues assessments from late August through October following the 30 June assessment date.

2.5 Is land tax deductible?

Yes — fully deductible against rental income in the year incurred. Standard treatment.

2.6 Common SA land tax mistakes

Trust trap. Many investors come to SA from NSW or QLD with trust structures that work fine in those states but get hammered under SA's tighter trust regime.

Aggregation surprise. All SA land you own is aggregated — three properties at $300,000 each = $900,000 aggregated, well above the $763,000 threshold.

Threshold expectation. Investors used to NSW's $1,075,000 threshold sometimes assume SA is similar — it's not. The $763,000 threshold catches more single-property investors than they'd expect, particularly with Adelaide's recent capital growth.

Part 3: Depreciation

Federal rules apply uniformly across all states.

Division 43 — Capital Works

Buildings constructed after 15 September 1987
2.5% per year of original construction cost
40 years from completion

Division 40 — Plant and Equipment

The May 2017 change still applies: individuals can't claim Division 40 on existing plant in second-hand residential properties acquired after 7:30pm AEST on 9 May 2017. Brand new properties: full claim. Second-hand: only on plant you install yourself. Companies are exempt; SMSFs and family trusts are not.

For SA investors, this rule has shaped buying behaviour — particularly for new house-and-land in Adelaide growth corridors (Mount Barker, Munno Para, Andrews Farm, Smithfield, Two Wells).

Always commission a depreciation schedule unless your property is pre-1987 with no significant renovations. SA-active QS firms include BMT, Washington Brown, Capital Claims, and Duo Tax.

Part 4: The four ATO compliance traps to avoid in 2025–26

Trap 1: Loan redraws for private purposes

The biggest trap. Interest on a redraw used for private purposes is not deductible. ATO sees this through the bank data matching program 2021–22 to 2025–26.

Example: $500,000 investment loan to buy an Adelaide property in 2023. Redraw $25,000 in 2025 for school fees. Loan now $475,000 investment / $25,000 private. Only 95% of interest is deductible going forward.

Use offset accounts for liquidity instead.

Trap 2: Repairs vs improvements

Repairs (immediate deduction): restore to previous condition. Improvements (capital, claimed over 40 years): upgrade beyond previous condition.

Initial repairs (fixing damage that existed at purchase) are not immediately deductible — they form part of CGT cost base.

Trap 3: Genuinely available for rent

Particularly relevant for SA holiday rentals (Victor Harbor, Goolwa, Kangaroo Island, Robe, Port Lincoln). PCG 2025/D7 specifically addresses holiday homes.

Trap 4: Travel claims

Non-deductible since 1 July 2017 for individual investors. Catches interstate investors with SA properties.

Part 5: Stamp duty in South Australia

Stamp duty is a one-off cost paid at purchase — not annually deductible. Forms part of the CGT cost base.

Standard rates 2025–26

For typical investment purchases:

$500,000 property → ~$21,330 duty
$750,000 property → ~$35,080 duty
$1,000,000 property → ~$48,830 duty
$2,000,000 property → ~$103,830 duty

Foreign Stamp Duty Surcharge — 7%

Foreign buyers pay an additional 7% surcharge on the dutiable value of SA residential property, in addition to standard transfer duty.

A foreign buyer purchasing a $1M Adelaide property pays:

Standard duty: ~$48,830
7% foreign surcharge: $70,000
Total: ~$118,830

As of 13 February 2025, stamp duty relief for first home buyers no longer extends to the foreign ownership surcharge — meaning foreign buyers pay the surcharge even if they qualify for other concessions.

When to pay

Stamp duty is payable at settlement. Conveyancers handle this through RevenueSA.

CGT cost base treatment

Do not claim stamp duty as an annual deduction. Record it as part of the CGT cost base.

Part 6: CGT considerations for SA investors

CGT is federal — same rules everywhere.

The 50% CGT discount for individuals and trusts (not companies) on properties held for more than 12 months.

Cost base includes purchase price, stamp duty, legal fees, building/pest inspection, buyer's agent fees, capital improvements (less Division 43 already claimed), and selling costs.

Negative gearing remains legal and unrestricted in 2025–26.

Part 7: Record keeping that will survive an ATO review

Five years from lodgement for income/expense records. The entire ownership period plus five years after sale for CGT records.

For SA investors specifically, keep:

Property manager statements
Bank statements showing rental income
Records of bond money retained
Records of any short-term rental income
Every invoice and receipt
Photos before and after for repairs
Annual loan statements and redraw records
Full QS depreciation schedule
Receipts for any new plant and equipment installed
Receipts for any capital improvements
RevenueSA land tax assessments
Stamp duty receipts (entire ownership period — CGT cost base)
Strata/owners corporation notices and minutes
Council rates notices

Tracking your SA deductions automatically

Propperly's free Tax Centre helps you:

Capture every deductible expense as it happens
Categorise to the exact ATO category
Track SA land tax against the (annually indexed) $763,000 threshold
Load your depreciation schedule once
Generate a clean EOFY summary
Flag the four ATO compliance traps before they become a problem

Get started with Propperly's free Tax Centre →

Frequently asked questions

Is SA land tax really deductible against my rental income?

Yes. Land tax is a holding cost incurred to produce rental income, fully deductible.

Does SA index its land tax thresholds?

Yes — annually based on average changes in site values. The 2025–26 individual threshold of $763,000 was gazetted on 5 June 2025. Most other states have frozen thresholds.

Does SA have a foreign owner land tax surcharge?

No. SA, WA, and NT are the only Australian jurisdictions without one.

What's the foreign purchaser stamp duty surcharge in SA?

7% on the dutiable value of residential property.

Can I claim depreciation on a second-hand Adelaide property bought in 2024?

Division 43 capital works: yes (if built after 15 September 1987). Division 40 on existing fittings: no — May 2017 change applies. Division 40 on anything new you install: yes.

When is SA land tax assessed?

Midnight 30 June. Same as QLD and WA.

Are SA's trust rules really tighter than other states?

Yes. The 2020 reforms significantly tightened trust treatment. Discretionary trusts can face surcharges from the first dollar in some cases, with limited beneficiary nomination options.

Can my SMSF claim Division 40 on existing plant in a second-hand property?

No. SMSFs and family trusts are not exempt from the May 2017 change.

Is negative gearing still legal in 2025–26?

Yes.

How long do I keep records?

Five years from lodgement for income/expense records. The full ownership period plus five years after sale for CGT records.

Related resources

SA Land Tax Calculator → SA Stamp Duty Calculator → CGT Calculator → Depreciation Estimator →

Other state guides:

Sources

ATO, Rental Properties Guide 2025 (NAT 1729)
ATO, draft TR 2025/D1, PCG 2025/D6, PCG 2025/D7
ATO, TR 2000/2 (deductibility of interest)
ATO, TR 2023/2 (effective life of depreciating assets)
RevenueSA, published land tax rates and rulings 2025–26 (gazetted 5 June 2025)
RevenueSA, published stamp duty rates 2025–26
Income Tax Assessment Act 1997
Land Tax Act 1936 (SA)
Land Tax (Miscellaneous) Amendment Act 2019 (SA)
Stamp Duties Act 1923 (SA)
Treasury Laws Amendment (Housing Tax Integrity) Act 2017

General information only — not personal financial, taxation, or legal advice. Consult a registered tax agent for advice specific to your circumstances. Last reviewed: May 2026.

Investment Property Tax Deductions SA 2026 | Propperly