[blink] Can anyone lend me some advise as to how you go about ‘proving’ to the tax man that a real estate hunting trip interstate or overseas has been purely for that reason, and therefore able to be written off in tax? (ie accommodation, travel expeses etc) or are there only certain aspects of the trip able to be classed as a deduction? Confused!!!
degebbett
Hi Bendon,
The ‘first trip’ is not a considered as a deductible expense, rather it is considered a capital cost and will be written off against any future capital gains tax liabilities should you sell.
However should you be considering a trip to do an inspection, some maintenance or possibly a strata management meeting – then a diary with appointment times, some appropriate receipts to prove you were where you said you were, some appointments with builders, maintenance people, property managers, strata managers etc would all be advisable.
Also be aware that costs are only proportionally deductibly if the investment stuff ties in with a holiday trip.
Derek
[email protected]Read my comments? Think I can help you? PM or email me.
Bendon – unless you actually purchase a property I don’t believe you can claim your travelling or accommodation expenses.
ShirleyBrendon,
What you are talking of is an american thing where you can claim a trip to just look at property. In Australia you need to own a property in the area you are travelling too. Then as Derek said you need to produce proof of meetings etc.
Hope this helps
Gav.
“Happy Days”
What if you have placed a deposit on a property without viewing the property, and are subsequently inspecting it or pre inspecting it a day before settlerment. Can you claim those travel expenses?
Hi all,
A bit more information on travel claims and apportioning costs.
The ATO travel guide in some detail.
The Hitchmans also owned another rental property in a resort town on the north coast of Queensland. They spent $1,000 on airfares and $1,500 on accommodation when they travelled from their home in Perth to the resort town, mainly for the purpose of holidaying, but also to inspect the property. They also spent $50 on taxi fares from the hotel to the rental property and return. The Hitchmans spent one day on matters relating to the rental property and nine days swimming and sightseeing.
No deduction can be claimed for any part of the $1,000 airfares.
The Hitchmans can claim a deduction for the $50 taxi fare.
A deduction for 10% of the accommodation expenses (10% of $1,500 –that is, $150) would be considered reasonable in the circumstances. The total travel expenses the Hitchmans can claim are therefore $200 ($ 50 taxi fare and $150 accommodation). Accordingly, Mr and Mrs Hitchman can each claim a deduction of $100.
Stingray – as you do not yet own the property the travel expenses are still considered capital and as such will be written off when CGT liabilities are calculated.
The ramblings on someone who is not an accountant – need to check it out with your accountant.
Derek
[email protected]Read my comments? Think I can help you? PM or email me.
thoughts from my accountant. If you are primarily operating as an “Investor”, with the majority of your income coming from that, then the trip would be a business trip.
CDCastleDreamer
I agree with castledreamer. I think if you have a company set up with the express intent of investing in property the trip is clearly a business expense. As to proving it your accountant will know what is required.
Regards,
Si
You must be logged in to reply to this topic. If you don't have an account, you can register here.
