Hi guys,
I've just purchased a house in Sydney's west with a granny flat. The property will be cashflow positive. The property is in my name.
can I claim the cost of fuel I use driving out there for renovations, rent inspections etc??
Cheers
Naremburn
Sure can, but you'd need to keep a log book.
How many times can this be done? Is there a limit to number of trips or distance travelled (if your IP was interstate)
Oh, also, if you fly interstate for maintenance, can family members flights be deductible? What else can be claimed whilst working away from home.
thanks
Naremburn123 wrote:Hi guys,I've just purchased a house in Sydney's west with a granny flat. The property will be cashflow positive. The property is in my name.
can I claim the cost of fuel I use driving out there for renovations, rent inspections etc??
Cheers
Naremburn
" … just purchased … "
" … WILL be cf+ … "
Sounds like a lot of capital expenditure on travel to make initial repairs and improvements in order to get it ready for rental. Of course you would have gone through all this with your accountant when you were getting advice about depreciation etc.
Cheers,
Rob
Only the people on the title can claim (not your whole family). Also if going overseas, for example, if you have a holiday while your there you only claim the % of the trip that was associated with managing the property.
There isn't a limit but the ATO will question if it's unreasonable.When we did our reno we were there everyday for a months 30 days of tolls and fuel.
After that you would only need to go 1-2 times a year unless you purchased a dud.You cannot claim when looking for property. Only after you've purchased something.
Correct me if I am wrong- I don't think you can technically claim the any expenses incurred in getting a newly purchased property ready for rental. So if you purchased a property, then did maintenance (i.e. painting, fixing gutters etc) prior to having it available for lease, then these expenses would be added to teh cost base and not able to be claimed as a mainenance deduction for that finaincial year??
And I think any costs associated with a renovation (such as fuel, km's travelled in your car) might not be able to be claimed as a maintenance deduction because a renovation might be capital expendidture (if you are putting in kitchens, renovating bathrooms etc). Wouldnt these costs be added to the cost base of the renovation and depreciated over the effective life of the renovation? Having said that, I try to get those costs classified as a maintenance item so I can claim them straight away.
Cheers,
LukeNot an accountant but:
Travel is usually claimed on a per km basis for total travel up to 5000km. Once you go over 5000km then you are able to claim travel costs as a percentage of total running costs.
You will need to be careful about this whole situation;. As Luke has stated some 'repairs' will be classified as renovations and will therefore be eligible for depreciation rather than deduction. When I last looked renovations/repairs done very early in ownership may not be allowed as deductions as teh ATO can rule that the property was bought in such a condition, you knew this, and therefore repairs will be classified as capital expenses.
Be careful tagging proeprty work onto the end of a holiday. The old days of apportioning the trip based on time spent on your property investing V holiday times has now been replaced by 'why the trip was truly taken' – for example mum and dad take family to teh GOld Coast for 12 days and spend a day tridying their investment property up. In this situation it is plausible for the ATO to deny any claims because it could be reasonably argued that the true purpose of the trip was 'holiday'
such claims are not straight forward anymore
Thanks for the advice!!
I read on here once that gifts to the tennants are tax deductible? I did give my tenants a bottle of bubbly and a carton, as they have done some great things to the place, do I just keep the receipt for tax purposes?
boney bream wrote:Thanks for the advice!!I read on here once that gifts to the tennants are tax deductible? I did give my tenants a bottle of bubbly and a carton, as they have done some great things to the place, do I just keep the receipt for tax purposes?
Hmmm, interesing. I suppose that you technically should be able to, but it might be hard to convince the ATO during an audit that that case of beer and bottle of wine was given to the tenants and not drunk by yourself. Would like to hear other peoples opinions though, as if you can claim this type of thing easily enough I will be telling the ATO I give my tenants cases of beer all the time and keeping the receipts.
I guess your accountant would let you know whether you should claim it or not. If the property was owned in a trust structure I guess it would be easier to claim as the trust should be treated like a business and at arms length to the beneficiaries (i.e. you).
Cheers,
Luke
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