Property investors are prone to commit tax errors, such as over-claiming on interest, claiming capital works as repairs, and failure to keep the right records.

Investors who have refinanced their home loan to purchase private assets such as cars or boats, or use the money for personal living expenses, often claim too much interest, according to Domain's Advice Editor Dan Butkovich.

"In these instances, investors can only claim interest on the portion of the loan used to buy the rental property, not the personal items. To avoid this, it's best to speak to your accountant to ensure you're claiming the right portion of interest," he told Your Investment Property.

Claiming capital works as repairs is another common mistake. "Capital work involves improving, replacing or extending a structure or part of a property, and can only be claimed over an extended period of time. Repairs, on the other hand, must relate directly to wear and can be claimed in the financial year the repairs occurred," Butkovich told Your Investment Property.

Butkovich said that the third most common tax mistake property investors make is not keeping the right records, noting that all investors must have evidence of income and expenses. The practice enables property players to claim everything they are entitled to.

"Having a good filing system that works for you is highly recommended. Another thing to note is that capital gains tax may apply when you sell your rental property, so it's important to keep records over the period you own the property and for five years from the date you sell it," he told Your Investment Property.