Capital or private expenses can’t be deducted from your rental income. Capital expenses are costs you incur to buy or increase the value of a capital asset. Private expenses are incurred for your own benefit and are not connected with producing taxable income.
The following are non-deductible expenses:
The purchase price of a rental property
The capital part of any mortgage repayment(s)
Interest on money which you borrow for some purpose other than financing the rental property, even if you use the rental property to secure such a loan
Any repairs and maintenance that go beyond replacement and are in fact improvements to the property
Real estate agent’s fees incurred as part of buying or selling the property
The cost of making any additions or improvements to the property (Capital Improvements).
Depreciation on the buildings from the 2011-2012 income year.