• Video transcript - Claiming travel expenses for your rental property

    Attention

    To see the video of this transcript, go to Deductions for travel expenses

    End of attention

    Host

    If you ever need to travel to inspect or repair your property, or say, to collect the rent, you may be able to claim the cost of your trip. Whether you can deduct the full amount or only a part of it will depend on the purpose of your journey.

    Phil, you often stop by your rental property, don’t you?

    Phil Hitchman

    That’s right. It’s on my way to work so it’s easy for me to pick up the rent and do minor repairs, which saves me money. It also means I can keep a good eye on things.

    Host

    And you claim those travel expenses as a deduction?

    Phil Hitchman

    No I can’t claim travel if it’s connected with a trip to or from work, as the main purpose of the trip is to go to work. But if I make a special trip on a weekend – for say repairs that might take longer - then I can claim that.

    Host

    So what do you claim?

    Phil Hitchman

    I use a logbook to record the kilometres and then simply claim the ATO’s cent-per-kilometre rate.

    Host

    If you fly to inspect your rental property, stay overnight, and return home on the following day, all of the airfare and accommodation would generally be allowed as a deduction because the only purpose of your trip was to inspect your rental property.

    But how does it work if you take a holiday and combine it with inspecting your rental property?

    Phil Hitchman

    We have a rental house in Queensland and we wanted to take a holiday. So we thought why not check on our investment while we’re there.

    We spent around $1000 on airfares and $1500 on the accommodation. Out of the 10 days that we were there, we spent 1 day checking up on our house. And we took a taxi there for $50.

    Host

    So what did you claim?

    Phil Hitchman

    We couldn’t claim any of the airfare, but we claimed the full taxi fare, and as we spent 1 out of the 10 days at the property we claimed 10% of the accommodation costs.

    Host

    So if the main purpose of your trip is to have a holiday and inspecting property is incidental to that main purpose, you can’t claim the cost of travel. But you can claim local expenses directly related to the property inspection and a reasonable proportion of the accommodation.

    Phil – just one more thing. What about travel expenses to buy your property? Can you claim those?

    Phil Hitchman

    No, we couldn’t claim the travel costs to inspect the property before we bought it. We also couldn’t claim the travel costs to attend property investment seminars that helped us find a rental property.

    Host

    If you’d like to find out more and to watch other videos in the series go to ato.gov.au/rental

      Last modified: 04 Mar 2015QC 41059