Claiming travel expenses relating to rental properties

When making a claim in relation to your residential rental property, there are specific circumstances for when you can and cannot claim travel expenses. The law about claiming travel expenses for rental properties changed in July 2017. In the last year alone, the ATO received more than 70,000 incorrect claims for travel to and from residential rental properties.

A residential property is defined as land or a building that is either occupied as a residence or intended for and capable of being occupied as a residence.

Owning one or several rental properties is not usually considered to be in the business of letting rental properties, with receiving income from letting property to a tenant being considered a form of investment rather than a business. Unless you have an ownership interest in the rental property, you cannot claim travel expenses, even when travelling for the purposes of maintenance or inspections. You can only claim travel expenses if you are in the business of letting rental properties or are an excluded entity.

Entities that can claim travel expenses are:

  • Corporate tax entity.
  • Superannuation plan that is not a self-managed superannuation fund.
  • Public unit trust.
  • Managed investment trust.
  • Unit trust or a partnership.

For those who are eligible to claim travel expenses, claims can be made on the following:

  • Preparing the property for new tenants (except the first tenants).
  • Inspecting the property during or at the end of the tenancy.
  • Undertaking repairs, where those repairs are because of damage or wear and tear incurred while renting out the property.
  • Maintaining the property, such as cleaning and gardening, while it is rented or available for rent.
  • Collecting the rent.
  • Visiting an agent to discuss the rental property.

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