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  • Deductions

    You may be able to claim deductions for your work-related expenses. Work-related expenses are expenses you incur on items used to earn your income as a real estate employee.

    To claim a deduction for a work-related expense:

    • you must have spent the money yourself and weren't reimbursed
    • it must be directly related to earning your income
    • you must have a record to prove it (usually a receipt).

    If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion.

    You can use the ATO app's myDeductions tool to help keep track of your work-related expenses. It’s an easy way to capture information on-the-go and makes tax time quicker by uploading your deductions to your tax return.

    For a summary of common deductions for real estate employees, see Real estate professionals deductions (PDF, 176KB)This link will download a file.

    Or, for a detailed list to help you work out if your expense is deductible, and how much you can claim, see:

    Common expenses A–F

    Details on claiming common real estate employee expenses for:

    Advertising

    You can claim a deduction for the cost of advertising for example through newspapers, letterbox drops, signage and bunting.

    You can't claim a deduction for the cost of advertising if you earn your income from a fixed salary and you aren't entitled to earn commission.

    Certificate of registration

    You can claim a deduction for the cost of renewing a real estate certificate of registration held by you as an employee in respect of your employment. You can't claim a deduction for the cost of obtaining the initial certificate of registration.

    Car expenses

    You can't claim a deduction for the normal trips between your home and work. These are private expenses even if you live a long way from your usual workplace or have to work outside normal business hours.

    The limited exception to this is if you must carry bulky tools or equipment between home and work. Then, you can claim a deduction only if:

    • your employer requires you to transport the tools or equipment for work, that is you don't carry them as a matter of personal choice or convenience
    • the tools or equipment are essential to earning your income
    • there's no secure area for storing them at your workplace
    • the equipment is bulky – meaning it's heavy and/or cumbersome.

    You can claim a deduction for the cost of using your car when you're travelling for work. For example, when you:

    • drive between separate jobs on the same day – for example, travelling to a separate job
    • drive to and from an alternate workplace for the same employer on the same day – for example, driving between separate real estate offices or properties for the same employer.

    The Work-related car expenses calculator helps calculate the amount you can claim as a deduction for car expenses.

    You must keep records of your car use. If you drive a car you can choose between the cents per kilometre method or the logbook method to calculate your deduction. If you use the logbook method, you need to keep a logbook to help you determine the percentage of work-related use of your car. If you use the cents per kilometre method, you need to provide a calculation of your work-related kilometres. You must be able to show that the kilometres travelled were work-related.

    If you own a motorcycle, or a vehicle with a carrying capacity of one tonne or more, or nine passengers or more you can deduct your actual expenses.

    Example: alternative workplace that isn't a regular workplace

    Trevor is a real estate agent who travels from his normal workplace to his employer's head office to attend a meeting. After the meeting he travels directly back to his normal workplace and then home.

    Trevor can claim the cost of each journey between his workplace and head office as a deduction as the trips are for work purposes.

    End of example  

    Example: alternative workplace that isn't a regular workplace

    Patricia is a property manager who looks after a large number of properties. Two mornings a week Patricia travels from home directly to different clients' properties to carry out rental inspections. She then travels to her normal workplace.

    Patricia can claim a deduction for the travel between:

    • home and different clients' properties
    • one client's property and another
    • clients' properties and her normal workplace.
    End of example  

    Example: bulky tools – not considered bulky equipment

    Sue is a real estate sales person who uses a laptop computer in the office and when she visits clients. She carries the computer to and from work in her car. As the computer isn't considered bulky equipment she can't claim a deduction for her travel costs to and from work based on transporting bulky tools and equipment.

    End of example

    See also:

    Car – leasing and hire purchase payments

    One of the big differences between commercial leasing and hire purchase is in the handling of tax deductions. With hire purchase, instead of claiming the whole monthly payment as a tax deduction as you do with a lease, you claim the depreciation of the motor vehicle and any interest charged.

    Hire purchase

    Under a commercial hire purchase agreement you don't become owner of the motor vehicle until all monies owed under the arrangement are paid. However, you can still claim a tax deduction for the depreciation on the motor vehicle as well as the interest component of the loan repayments to the extent that the motor vehicle is used for work-related purposes. That is, interest on the loan payments and depreciation up to the car limit.

    Commercial leasing

    If you take out a car lease, the lender agrees to rent the vehicle to you for a set period for an agreed amount. If the vehicle is entirely for work purposes and not a luxury car, the lease payments are fully tax deductible but you can't claim depreciation.

    If the vehicle is a luxury car, you can claim a tax deduction for the finance component of the lease payments (interest) but not for the part of the lease payments that represent repayments of principal. You can also claim a deduction for depreciation subject to the car limit.

    If you lease a car under a salary sacrifice novated lease arrangement, you can't claim a deduction for the lease payments as these expenses are incurred by your employer. You also can't claim depreciation.

    Child care

    You can't claim a deduction for child care that you pay for when you're working. It's a private expense.

    Clothing expenses (including footwear)

    You can claim a deduction for the cost you incur when you buy, hire, repair or replace clothing, uniforms and footwear you wear at work if it's:

    • protective
    • occupation specific (and not a conventional, everyday piece of clothing)
    • a uniform.

    To claim a deduction for the cost of a uniform it must be unique, distinctive and compulsory to wear. Clothing in a specific colour or brand isn't enough to classify clothing as a uniform. For example, a shirt with the corporate logo on it that you must wear when you work is a uniform, so you can get a deduction for buying it.

    You can't claim a deduction for the cost of buying or cleaning plain clothing worn at work, even if your employer tells you to wear it. You can't claim for:

    • heavy duty conventional clothing such as jeans, drill shirts and trousers
    • running shoes or casual shoes.

    These are private expenses.

    Example: compulsory uniform with logo

    Mike has to wear shirts his employer provides. Each shirt has his employer's company logo embroidered on it. As part of his uniform, he also has to wear black pants and black shoes.

    Mike can claim a deduction for the cost of laundering the shirts as they are:

    • distinctive items with the employer's logo
    • compulsory for him to wear at work.

    However, he can't claim the cost of purchasing or cleaning his black pants or shoes as they're items of a conventional nature.

    End of example  

    Example: registered with AusIndustry

    Lena is a sales person with a large real estate company. She also works in the reception area for a number of hours each day. Reception staff wear a suit in the company's colours monogrammed with the company logo. It isn't compulsory for a staff member to wear the clothing, but the employer encourages staff members to do so.

    Lena can claim a deduction for the cost of buying and maintaining the suit if the uniform is entered on the Register of approved occupational clothing. It's the employer who seeks registration for the clothing with AusIndustry.

    End of example

    See also:

    Decorating properties

    You can claim a deduction for the cost of decorating items used at properties, such as flowers.

    Entertainment expenses

    You can't claim a deduction for the cost of any entertainment. This includes the cost of business lunches and attendance at sporting events, gala or social nights, concerts or other similar types of functions or events. This applies even if you discuss business matters at the occasion.

    The 'provision of entertainment' generally means:

    • entertainment by way of food, drink, recreation
    • accommodation or travel to do with providing entertainment by way of food, drink or recreation.

    Example: entertainment costs

    Rachael attends a social breakfast organised by the Real Estate Institute. These breakfasts are held every other month to encourage new salespeople in the real estate industry to meet socially with colleagues. Rachael isn't entitled to a deduction for the cost of attending the breakfast.

    End of example

    For more real estate employee expenses, see:

      Last modified: 08 Apr 2019QC 24417