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

TL;DR for WA investors in 2025–26:
- WA land tax kicks in at $300,000 — moderate threshold. Includes a unique flat $300 bracket between $300,001 and $420,000.
- MRIT (Metropolitan Region Improvement Tax) of 0.14% applies on top of land tax for properties in the Perth metropolitan area above $300,000.
- No foreign owner surcharge on land tax. WA is one of only two jurisdictions (alongside NT) without one.
- Stamp duty uses uniform rates with no premium tier. 7% Foreign Transfer Duty Surcharge applies to foreign buyers of residential property.
- First home buyer exemptions expanded in March 2025 — full exemption to $500,000 and concession to $700,000 (Metro/Peel) or $750,000 (Regional).
- Negative gearing remains legal and unrestricted in 2025–26.
- The ATO is data-matching loan redraws against tax returns through to 2025–26.

Western Australia is in the middle of a property cycle high. Perth has had strong capital growth from 2023 through 2026, and the WA economy continues to benefit from mining and resources investment. That growth has pushed many WA investors into the land tax threshold for the first time, and into MRIT exposure if they're in the Perth metro area.

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

Why Western Australia is different

The WA-specific things that affect your return outcomes:

Land tax assessment date is 30 June — same as QLD and SA. Different from NSW and Victoria (31 December).

Unique flat $300 bracket. Between $300,001 and $420,000 of taxable land value, WA charges a flat $300 — not a percentage. From $420,001 onwards, percentage rates apply.

MRIT (Metropolitan Region Improvement Tax) — 0.14%. Applies in addition to land tax for properties in the Perth metropolitan area above the same $300,000 threshold. Funds infrastructure improvements in the metro area.

No foreign owner land tax surcharge. WA does not currently impose a land tax surcharge on foreign owners. NT is the only other jurisdiction without one.

7% Foreign Transfer Duty Surcharge on stamp duty for foreign buyers of residential property.

First home buyer thresholds increased March 2025 — exemption to $500,000 (was $450,000), concession to $700,000 metro / $750,000 regional (was $600,000).

WA stamp duty uses uniform rates with no premium tier. The top marginal rate of 5.15% applies for property over $725,000 — relatively investor-friendly compared to VIC's 6.5%.

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

Part 1: Common deductions every WA investor can claim

Perth metro investor

MRIT looks small — until you have multiple Perth properties

Combined annual state tax (land tax + MRIT) by total Perth metro land value. The 0.14% MRIT compounds quietly alongside standard land tax.

What this means

At $500K of Perth metro land, MRIT adds only $280/year on top of $500 in standard land tax — barely noticeable. By $1.6M (a typical 3-property Perth metro portfolio), MRIT alone is $1,820/year and the combined annual state tax pushes $9,000. The 0.14% rate is misleading at scale.

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 WA investment property is fully deductible — the largest deduction for most investors. Interest on loans for capital improvements is also deductible. Redraw for private purposes is the biggest trap (Part 4).

2. Property management fees

Perth metro PM fees typically run 7–9%. Regional WA varies more widely. All recurring management fees, letting fees, advertising, and inspection charges are deductible.

3. Council rates

Local government rates from your WA council (City of Perth, Stirling, Wanneroo, Joondalup, Mandurah, Bunbury, Geraldton, etc.) are fully deductible.

4. Water rates and usage

Water Corporation supply charges are typically a landlord cost. Usage usually passes to the tenant. The portion 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 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 (and MRIT)

WA land tax is fully deductible. MRIT (where it applies) is also a deductible holding cost. Covered in detail in Part 2.

9. Advertising for tenants

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)

The rental portion of your tax agent's fees is deductible.

14. Pest control

Routine pest control between tenancies and termite inspections are immediately deductible. Termite damage is a real risk in WA, particularly in coastal Perth and the Pilbara.

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 are immediately deductible.

17. Travel to property — heavily restricted

Non-deductible since 1 July 2017 for individual investors with residential property. This rule is now eight years old. Companies and trusts (other than excluded entities) are exempt.

For interstate investors with WA properties (FIFO workers, mining executives based interstate, eastern-state investors who bought into the Perth boom), this is a significant restriction. There is no workaround for individuals other than holding through a corporate structure — which carries its own tax consequences.

Part 2: WA Land Tax and MRIT — the rules that actually matter

2.1 Land tax

Levied by RevenueWA annually, based on the unimproved value of WA 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

Total taxable land value	Land tax payable
Up to $300,000	$0
$300,001 – $420,000	$300 flat
$420,001 – $1,000,000	$300 + 0.25% of value above $420,000
$1,000,001 – $1,800,000	$1,750 + 0.90% of value above $1,000,000
$1,800,001 – $5,000,000	$8,950 + 1.80% of value above $1,800,000
$5,000,001 – $11,000,000	$66,550 + 2.00% of value above $5,000,000
Above $11,000,000	$186,550 + 2.67% of value above $11,000,000

Source: RevenueWA published rates 2025–26.

The flat $300 bracket is unusual — it's WA's way of softening the entry into the land tax system. Below $420,000 of taxable land value, the bill is genuinely small.

2.2 MRIT — Metropolitan Region Improvement Tax (0.14%)

A Perth-specific levy. If your land is in the Perth metropolitan region and the unimproved value exceeds $300,000, MRIT applies at 0.14% of the value above $300,000.

The Perth metropolitan region is broadly defined and covers the City of Perth and all surrounding council areas — Stirling, Wanneroo, Joondalup, Bayswater, Belmont, Canning, Cockburn, Fremantle, Gosnells, Kalamunda, Kwinana, Melville, Mundaring, Rockingham, Serpentine-Jarrahdale, Subiaco, Swan, Victoria Park, Vincent, and parts of Mandurah and the Peel region.

For a Perth metro investor with $600,000 of taxable land:

Land tax: $300 (flat) on the $300,001–$420,000 portion + 0.25% × $180,000 = $750 → $750 total (covered by the next bracket)
MRIT: 0.14% × ($600,000 − $300,000) = $420
Combined: $1,170

MRIT funds infrastructure works under the Metropolitan Region Scheme.

2.3 No foreign owner surcharge

WA does not impose a foreign owner surcharge on land tax. This is a genuine differentiator from NSW (5%), VIC (4%), QLD (3%), TAS (2%), and ACT (0.75%).

This makes WA structurally more attractive for foreign investment in residential real estate from a recurring tax perspective — though the federal foreign investment review framework (FIRB) and the temporary ban on established residential purchases by foreign buyers (1 April 2025 to 31 March 2027) still apply.

2.4 When are WA land tax assessments issued?

RevenueWA typically issues assessments between September and January following the 30 June assessment date. This is later than most other states.

WA also operates a self-assessment model — if your aggregated taxable land value is $300,001 or more and you haven't registered with RevenueWA, you have an obligation to do so. Registration is not automatic.

2.5 Are land tax and MRIT deductible?

Yes — both are fully deductible against rental income in the year incurred. They're recurring holding costs, treated identically to NSW or QLD land tax for ATO purposes.

2.6 Common WA land tax mistakes

Forgetting to self-register. Many WA investors first triggered above-threshold liability during the 2023–25 Perth boom and didn't realise they needed to register. RevenueWA does eventually find them through Landgate data matching, and penalties apply.

Underestimating MRIT. It looks small (0.14%) but compounds across multiple properties. A Perth metro investor with $1.5M of total taxable land pays $1,680 of MRIT each year on top of their general land tax.

Missing the self-assessment deadline. WA land tax has different lodgement timing than other states — investors moving from interstate sometimes assume the same calendar year cycle and lodge late.

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 WA investors, this rule has shaped buying behaviour particularly for new Perth metro apartments and new house-and-land packages in growth corridors (Ellenbrook, Alkimos, Baldivis). The depreciation differential for new vs second-hand stock is real and material.

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

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: $700,000 investment loan in 2023 to buy a Perth investment. Redraw $40,000 in 2025 for a holiday. Loan is now $660,000 investment / $40,000 private. Only 94.3% of interest is deductible going forward.

Use offset accounts instead of redraw for liquidity.

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 WA holiday rentals (Margaret River, Dunsborough, Yallingup, Bremer Bay, Exmouth, Broome). PCG 2025/D7 specifically addresses holiday homes.

Trap 4: Travel claims

Non-deductible since 1 July 2017 for individual investors. This catches WA investors with interstate residential rentals and FIFO workers with WA rentals.

Part 5: Stamp duty in Western Australia

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

Standard rates 2025–26

WA uses uniform rates for all property types — no separate investor scale, no premium tier above $1M.

For typical investment purchases:

$500,000 property → ~$17,765 duty
$750,000 property → ~$28,453 duty
$1,000,000 property → ~$42,615 duty
$2,000,000 property → ~$94,265 duty

First home buyer concessions (March 2025 changes)

While not relevant for investment purchases, worth noting if you're an investor previously eligible:

Houses (Perth/Peel): exemption $450K → $500K, concession $600K → $700K
Houses (Regional): exemption $450K → $500K, concession $600K → $750K
Vacant Land: exemption $300K → $350K, concession $400K → $450K
Off-the-Plan concession extended to June 2026

Foreign Transfer Duty Surcharge — 7%

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

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

Standard duty: ~$42,615
7% foreign surcharge: $70,000
Total: ~$112,615

When to pay

Transfer duty is payable before settlement. Conveyancers handle this through Landgate and RevenueWA.

CGT cost base treatment

Do not claim stamp duty as an annual deduction. Record it as part of the CGT cost base. A $42,615 stamp duty bill on a $1M Perth purchase reduces your eventual taxable capital gain by the same amount when you sell.

Part 6: CGT considerations for WA 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.

For Perth investors specifically: the strong 2023–2026 capital growth means many properties are sitting on substantial unrealised capital gains. Taking advice on CGT timing before selling is worthwhile — particularly if you can shift the sale year to align with lower-income years.

Part 7: Record keeping that will survive an ATO review

The ATO requires you to keep records for at least 5 years from lodgement. For CGT, the entire ownership period plus 5 years after disposal.

For WA investors specifically, keep:

Property manager statements
Bank statements showing rental income
Records of bond money retained
Records of any short-term rental income (Airbnb, Stayz)
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
RevenueWA land tax assessments (and MRIT where applicable)
Stamp duty receipts (entire ownership period — CGT cost base)
Strata notices and minutes
Council rates notices

The reality of doing this in spreadsheets

Most investors try to manage this in spreadsheets, PDFs, and shoeboxes of receipts. Three years in, gaps emerge. Receipts go missing. The GST treatment on body corporate fees is wrong.

The ATO's compliance focus assumes you've kept clean records. If you haven't, the safe outcome is walking away from claims you genuinely could have made.

This is exactly what Propperly is built to fix.

Tracking your WA deductions automatically

Propperly's free Tax Centre helps you:

Capture every deductible expense as it happens
Categorise to the exact ATO category
Track WA land tax against the $300,000 threshold and apply MRIT for Perth metro
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 WA land tax really deductible against my rental income?

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

Does WA have a foreign owner land tax surcharge?

No. WA is one of only two Australian jurisdictions (alongside NT) without one.

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

7% Foreign Transfer Duty Surcharge on WA residential property.

What's MRIT?

Metropolitan Region Improvement Tax — a 0.14% levy on the unimproved land value above $300,000 for properties in the Perth metropolitan region. It funds Perth metropolitan infrastructure.

Can I claim depreciation on a second-hand Perth 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 WA land tax assessed?

Midnight 30 June. Same as QLD and SA. Different from NSW and VIC (31 December).

Why do WA assessments arrive later than other states?

RevenueWA typically issues assessments between September and January following the 30 June assessment date — later than NSW or VIC. Plan for the cash flow accordingly.

Do I have to register for WA land tax myself?

Yes — if your aggregated taxable land value is $300,001 or more and you're not already registered, you have a self-registration obligation. Registration is not automatic.

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. No changes have been announced.

How long do I keep records?

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

Related resources

WA Land Tax Calculator → WA 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)
RevenueWA, published land tax rates and rulings 2025–26
RevenueWA, published transfer duty rates 2025–26
WA Department of Treasury, Overview of State Taxes and Royalties 2025–26 (November 2025)
Income Tax Assessment Act 1997
Land Tax Act 2002 (WA)
Duties Act 2008 (WA)
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 WA 2026 | Propperly