Details on claiming common real estate employee expenses for:
- Car expenses
- Car leasing and hire-purchase payments
- Certificate of registration, licences and other certificates
- Child care
- Clothing and uniform expenses (including footwear)
- Club membership
- Decorating properties
- Drivers licence
- Entertainment and social functions
- Fines and penalties
- First aid courses
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.
Example: advertising expenses paid by client
Robin is a real estate salesperson. Robin receives a small base salary and earns commission on the properties she sells.
When Robin is engaged to sell a property, the property is advertised on an internet site and, depending on the property, in the real estate lift out in the Saturday newspaper. Robin's clients always pay for the cost of advertising.
Robin can't claim a deduction for the advertising because she does not incur the expenses.End of example
You can't claim a car expenses deduction for normal trips between your home and regular place of work. These are private expenses, even if you:
- live a long way from your usual or regular workplace
- have to work outside normal business hours (for example, weekend or early mornings).
In limited circumstances, you can claim the cost of trips between home and work, such as where you carry bulky tools or equipment for work or where you had shifting places of employment.
To be able to claim a deduction for the cost of trips between home and work while carrying bulky tools or equipment, all the following conditions must be met:
- the tools or equipment are essential to perform your employment duties
- the tools or equipment are bulky, meaning that
- because of the size and weight, they are awkward to transport
- they can only be transported conveniently using a motor vehicle
- there is no secure storage for such items at the workplace.
It will not be sufficient if you transport the tools or equipment merely as a matter of choice. For example, if your employer provides reasonably secure storage, your decision to transport items home will be a matter of choice.
You are considered to have shifting places of employment where you have no fixed place of work and you continually travel from one work site to another before returning home.
You can also claim a deduction for the cost of using a car you own, lease or hire (under a hire-purchase agreement) when you drive:
- directly between separate jobs on the same day – for example, travelling from the real estate agency office to your second job as an auctioneer with another agency
- to and from an alternative workplace for the same employer on the same day – for example, driving between separate real estate offices or residential open homes for the same employer
- from home directly to an alternative workplace - for example, driving from home to inspect a property instead of going to the office first.
You can't claim car expenses for a car you use under a salary sacrifice or novated lease arrangement. This is because it's usually your employer leasing the car from the financing company and making it available for your use. You can however claim additional work-related expenses you incur that are associated with your work use of the car such as parking and tolls.
To claim a deduction, you must keep records of your car use. You can choose between the logbook method or the cents per kilometre method to work out your deduction.
If you use the logbook method, you need to keep a valid logbook to help you work out the percentage of work-related use along with evidence of your car expenses (including petrol, registration, insurance, servicing, automobile association renewal fees such as RACV, car wash expenses etc).
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 claim your work-related car expenses using one of the above methods, you can’t claim any further deductions in the same tax return for the same car. For example, petrol, servicing, and insurance costs.
To claim a deduction in your tax return, include the amount of your claim at Work-related car expenses. The Work-related car expenses calculator can help you work out the amount you can claim as a deduction.
You can’t use the cents per kilometre or logbook methods to work out your claim for a:
- vehicle with a carrying capacity of one tonne or more (such as a ute)
- vehicle that can transport 9 passengers or more (such as a minibus).
For these vehicles, you can claim the actual expenses you incur for your work-related travel. This includes costs such as fuel, oil, insurance and loan interest along with the decline in value of the vehicle. You must keep receipts for all your expenses and records to show your work-related use of the vehicle. Although you are not required to keep a logbook, it is the easiest way to calculate your work-related use or your vehicle.
To claim a deduction for actual expenses you incur for a vehicle not defined as a car, include the amount at Work-related travel 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 home.
Trevor can claim the cost of the journey from his workplace to head office and from head office directly to his home. The travel between his normal workplace and head office is travel between workplaces.
The cost of Trevor's travel from head office directly home is deductible because he is travelling from an alternative workplace to his home.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. 2 mornings per 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
- client properties and her normal workplace.
Example: bulky tools – not considered bulky equipment
Diana is a real estate salesperson 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 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
Example: shifting places of work
Emmanuel is a real estate salesperson. Although Emmanuel's employer has an office, because of the nature of his job and the need to continually travel from one place to another, he isn't required to report there every day before starting or finishing work.
Emmanuel only goes into the office for sales meetings or if a client wants to meet him there. These visits to the office can be at any time of the day.
Each day, Emmanuel travels to any number of the following to perform his duties before returning home:
- meetings with prospective sellers at coffee shops or at their property
- meetings with clients at his employer's office or the client's property to sign contracts or other documents
- his employer's office for meetings
- meetings with prospective buyers at his employer's office or coffee shops
- open homes or inspections at the properties he has for sale.
Emmanuel can claim a deduction for the costs of travelling from his home to his first appointment and from his last appointment to his home each day. Even though Emmanuel's employer has an office, it is not Emmanuel's fixed place of work. Emmanuel has shifting places of work.
If Emmanuel did travel to his employer's office each morning to start work there and returned there each day before finishing work, Emmanuel couldn't claim a deduction for the costs of travelling between his home and the office each day. This travel would be normal home to work travel and would be a private expense.End of example
The big difference 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 decline in value 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 decline in value of 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 decline in value 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 used entirely for work purposes and not a luxury car, the lease payments are fully tax deductible but you can't claim the decline in value of the car.
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 decline in value of the car 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 the decline in value of the car.
You can claim a deduction for the cost of renewing a real estate certificate of registration or real estate licence held by you as an employee in respect of your employment.
You can't claim a deduction for the cost of getting the initial certificate of registration or licence to gain employment.
You also can't claim a deduction for the cost of getting a police clearance certificate to gain employment as a real estate agent.
You can't claim a deduction for the cost of child care (including school holidays and before and after school care) when you’re working. It’s a personal expense, and the expenses have no direct connection to earning your income.
With a few exceptions, clothing can't be deducted as a work-related expense
You can't claim conventional clothing (including footwear) as a work-related expense, even if your employer requires you to wear it and you only wear these items of clothing at work.
'Conventional clothing' is everyday clothing worn by people regardless of their occupation - for example, business attire worn by real estate agents.
You can claim a deduction for costs you incur to buy, hire, repair or replace clothing, uniforms and footwear you wear at work if it's in one of the following categories:
- protective – clothing with protective features and functions you wear to protect you from specific risks of injury or illness at work. For example, steel-capped boots, fire-resistant clothing, or boiler suits that protect conventional clothing. Conventional clothes you wear at work are not regarded as protective clothing if they lack protective qualities designed for the risks of your work. This includes jeans, drill shirts, shorts, trousers, socks, closed shoes.
- occupation-specific – clothing that distinctly identifies you as a person associated with a particular profession, trade or occupation. For example, a judge's robes or a chef's chequered pants. Items traditionally worn in a profession are not occupation-specific where the clothing is worn by multiple professions.
- a compulsory uniform – clothing that your employer strictly and consistently enforces you wear by workplace agreement or policy and distinctly identifies either
- you as an employee working for a particular employer
- the products or services your employer provides
- a non-compulsory uniform – clothing that your employer registers on the Register of Approved Occupational Clothing with AusIndustry.
You can't claim a deduction if your employer buys, repairs or replaces your clothing.
Example: compulsory uniform with logo
Farhad 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.
He can't claim the cost of buying or maintaining his black pants or shoes as they're conventional clothing.
Farhad can't claim a deduction for the shirts as his employer provides them to him but he 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.
Example: registered with AusIndustry
Lena is a salesperson with a large real estate company. She also works in the reception area for a number of hours each day.
Although it isn't compulsory, reception staff are encouraged to wear a suit in the company's colours monogrammed with the company logo. The jacket, skirt, pants and shirt are registered by Lena's employer on the register of approved occupation clothing with AusIndustry. Lena buys several suit items to wear each day to work.
Lena can claim a deduction for the cost of buying and maintaining the suit because it is a non-compulsory uniform registered with AusIndustry.End of example
Example: you can’t claim a deduction for the purchase of conventional clothing
James is a property manager and required to comply with dress standards and wear office attire while at work. James buys several collared shirts and long pants from a department store.
James can't claim the cost to buy or maintain these items as they are considered conventional clothing and private in nature.End of example
You can't claim a deduction for the cost of recreational club fees. The expenses are private.
Example: Local golf club membership
Geoff is a real estate salesperson. He is a member of his local golf club and plays there regularly. Geoff enjoys golf and he thinks being a member also allows him to meet potential clients. Membership to the golf club costs Geoff $930 annually.
Geoff can't claim a deduction for his golf club membership fees. The expense is private.End of example
You can claim a deduction for the cost of decorating items used at properties, such as flowers, if you're entitled to earn a commission from the sale of the property.
You can't claim a deduction for the cost to get or renew your drivers licence, even if you must have it as a condition of employment. This is a private expense.
You can't claim a deduction for the cost of any entertainment, fundraising or social functions. This applies even if they are compulsory, non-compulsory or you discuss work matters at the event.
Entertainment and social functions include the cost of:
- work breakfasts, lunches or dinners
- attendance at sporting events
- gala or social nights
- concerts or dances
- cocktail parties
- other similar types of functions or events.
These are personal expenses because these events do not have a direct connection to your income-producing activities.
You also can’t claim the cost of travelling to and from functions.
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 can't claim a deduction for the cost of attending the breakfast.End of example
You can't claim a deduction for the cost of any fines or penalties you get when you travel to work, or during work, including parking fines, speeding fines or penalties.
Example: traffic fine not deductible
Chris is a real estate salesperson. While driving to an open house, Chris runs a red light because he is running late. Chris receives a fine which he pays.
Chris can't claim a deduction for the fine even though he was travelling for work purposes at the time of the offence.End of example
You can claim a deduction for the cost of first aid training courses if you are both:
- a designated first aid person
- need to complete a first aid training course to assist in emergency work situations.
You can’t claim a deduction if your employer pays for or reimburses you for the cost of the course.
Example: course paid for by employer
Aiden is a property manager. He is the designated first aid officer at work. His employer pays for him to complete a first aid course as well as the required refresher training.
Aiden can't claim a deduction as he doesn’t incur the expense.End of example
For more real estate employee expenses, see: