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Rental properties - claiming travel deductions

Contributed by Darryn Beckwith-Smith

You can claim a deduction for travel expenses incurred to inspect or maintain rental properties and to collect rent such as:

  • preparing the property for new tenants (except for the first tenants)
  • inspecting the property during or at the conclusion of tenancy
  • undertaking repairs, where those repairs are a consequence of the damage or wear and tear incurred while being rented out by you
  • maintenance of the property, such as cleaning and gardening, while it is rented or available for rent
  • collecting the rent
  • visiting your agent to discuss your rental property In contrast the following are examples of travel related expenses that are not deductible, despite people often incorrectly making such claims:
  • your own personal use of the property
  • travel to carry out general maintenance of the property while it is not genuinely available for rent
  • travel to undertake repairs, where those repairs are not a consequence of the damage or wear and tear incurred while being rented (for example, initial repairs before the property is rented out for the first time)

 

Domestic travel requiring an overnight stay

You may own a rental property that is located so far from where you live that it would be unreasonable to expect you not to stay near the property overnight when making an inspection. If this is the case you are entitled to claim a deduction for travel expenses incurred in travelling to the rental property. Where an overnight stay is involved, you would be entitled to claim for meals and accommodation. A common mistake is claiming travel expenses where the main purpose of the trip is to have a holiday or for other private purposes and inspection of the property is 'incidental' to that main purpose. In these cases only costs directly attributable to visiting the property will be deductible with other travel or accommodation costs incurred in getting to the holiday location will not be deductible.

Substantiating claims

A common mistake is that claims lack adequate substantiation. If your travel is interstate or over a considerable distance to inspect a rental property, the ATO would expect to find you have some written evidence to support that the travel occurred and what expense was incurred such as diarised records and receipts.

 

 

 

 

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