Hi,
Would the total cost for flights and hotel be tax deductible for the following:
Day 1: Fly in to destination
Day 2: Inspect Investment property
Day 3: Fly homeTherefore, will the cost of air tix and 2 nights stay at the hotel be tax deductible? Or do we have to proportion everything to 1/3 (ie. 1 out of 3 days there)?
Thanks.PS. Also, is taxi fares and meals tax deductible?
It all depends upon the purpose of the trip – if it is to inspect possible investments or a pre-purchase inspection leading to a new IP then these costs would be capitalised.
On the other hand, if it is to inspect your current properties then it is a cost of owing and you are entitled to inspect. Diarise the trip including all meetings that you hold with agents/tenants/suppliers/builders etc to justify your time & costs.
The advice of our accountant when asking the same question was that there is only a tax deduction AFTER a property is purchased. That is you cant go looking and claim the trip. The exception is if it is recognised that this is your JOB (and then you start getting into problems with trying to retain the CGT reduction).
But hey, despite there being one ATO, you still get different opinions between accountants so it would be wise to check with yours.
Mickhi
i would like to an answer to this question also. i have heard that if you go on one of those international property hunting trips (such as texas) that they can be classed as having an educational purpose, meaning that the costs of the trip can be claimed. is this a furphy?also, i have never heard of travel costs to see a property before it is purchased being classed as a capital cost. is this correct? does that mean that you can claim depreciation for those costs when you have purchased or does it only become a deduction when the property is sold?
Yes, I think that you cannot claim a trip to see a property prior to purchase, but the costs could come off of CG when selling.
If you already own property, then the trip could be claimable, but the percentage would depend on the purpose of the trip. If it was solely to inspect the property, then you could probably claim the lot including hotel, airfare, hirecar, etc though I am not sure about food. If you were taking your family with you, then it may be more of a holiday and so you could only claim a portion.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
thanks for that. so just to clarify, if i already own property and have no other job, if i go to the states with the intention to investigate the purchase of property, i should be able to claim most of the costs?
You must be logged in to reply to this topic. If you don't have an account, you can register here.
