Tax Deductions 2025 Australia: Latest Rules & Smart Tips

As tax season approaches, many Australians are looking for ways to boost their refunds and avoid paying more than they should. With several policy changes and expanded deduction categories in 2025, there are fresh opportunities to claim back on work expenses, investments, and even green upgrades. Whether you’re a salaried worker, self-employed, or a property investor, understanding what’s changed—and what’s stayed the same—can mean the difference between a modest return and a substantial windfall.

Key Tax Deduction Changes for 2025

The Australian Taxation Office (ATO) has introduced several noteworthy updates for the 2024-25 financial year. Here’s what’s new and what you need to watch:

• Home Office Expenses: With hybrid and remote work now the norm, the ATO has updated its fixed-rate method to $0.70 per hour for home office running costs. This now includes electricity, internet, phone, and even depreciation on office furniture. Detailed records are a must.
• Electric Vehicle (EV) Incentives: The EV Fringe Benefits Tax (FBT) exemption has been extended to include more models. Running costs, charging infrastructure, and even some lease payments may be deductible for business use.
• Work-Related Self-Education: The cap on self-education expenses has been lifted for courses directly related to your income. This includes micro-credentials, online short courses, and industry certifications.

Popular Tax Deductions for Individuals and Small Businesses

The ATO continues to target incorrect or inflated deductions, but there’s still a wide range of legitimate claims available. Here are some of the most valuable in 2025:

• Car and Travel Expenses: If you use your car for work (not commuting), you can claim a set rate per kilometre or actual expenses. Keep a logbook or digital tracking app for accuracy.
• Tools, Equipment, and Uniforms: Purchases or repairs for work-specific tools, safety gear, and uniforms with logos remain deductible. Items under $300 can be claimed outright.
• Investment Property Deductions: Landlords can still claim interest on investment loans, council rates, insurance, and depreciation on fixtures. The new 2025 rules clarify that travel to inspect properties is generally not deductible unless you’re a professional property manager.
• Charitable Donations: Donations of $2 or more to registered charities are deductible. New for 2025: digital receipts and payroll giving are streamlined through the ATO’s myGov portal.

Smart Strategies to Maximise Your Tax Return

Don’t leave money on the table. Here’s how to get the most from your tax deductions in 2025:

1. Keep Meticulous Records: The ATO’s focus on digital receipts and e-records means scanning or photographing receipts is now standard. Use apps or cloud storage to keep everything organised year-round.
2. Bundle Deductions: If you anticipate a higher income this year, consider prepaying work-related expenses (like insurance or memberships) to bring forward deductions into the 2024-25 year.
3. Review Super Contributions: Voluntary after-tax super contributions are deductible up to the concessional cap. This can reduce your taxable income and boost your retirement savings simultaneously.
4. Claim Your Green Upgrades: Solar panels, battery systems, and energy-efficient appliances may be deductible for rental properties or business use. The expanded green investment incentives for small businesses in 2025 make this especially worthwhile.

Real-World Example: Claiming Home Office Costs

Consider Anna, a Sydney-based graphic designer working three days a week from home. She logs her hours, keeps digital receipts for her ergonomic chair, and claims a portion of her internet and electricity bills. By using the updated fixed-rate method, Anna streamlines her claim—and maximises her refund—without the paperwork headaches.

Looking Ahead: Policy Watch for 2026

While 2025 has brought welcome clarity to many deduction categories, more changes are likely as the government continues to address cost-of-living pressures and climate transition. Keep an eye on possible adjustments to work-from-home rules, EV incentives, and property deductions in the next federal budget.