Edited version of private advice

Authorisation Number: 1052016847933

Date of advice: 9 August 2022

Ruling

Subject: Am I in business - property management

Question 1

Are you carrying on a business (as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997)) of property management?

Answer

Yes. It is considered that you are carrying on a property management business. The activity is undertaken on a continuous and repetitive basis for the purpose of profit. The activities are organised in a business-like manner, there is the keeping of records and the use of a system. Your business activities are characteristic of how ordinary businesses in the same industry are conducted.

This ruling applies for the following period:

1 July 20XX to 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

This private ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are different from these facts, this private ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You manage XXXX properties; a number of properties are leased for short stays on platforms such as with XXXX and long term tenancy.

The tasks you undertake / oversee include property marketing through online platforms, pricing, guest management (enquiries, pre-booking tasks, check-ins, help and support during stays), repairs and maintenance (preventative maintenance, repairs and replacement of appliances, fixtures, furniture and general property maintenance), housekeeping and cleaning.

You do not have a business plan. An alternative document was provided. This was a comprehensive document that clearly outlined all the property management activities undertaken by you on a regular basis.

You research information from experts in the industry on how to improve your property management services. Meetings are held regarding future upgrades, styling and furnishings to ensure the properties are relevant and competitive.

In line with market rate research, you charge XXXX for property management. Most of the income derived are business profits, as expenses incurred are minimal. There are expenses incurred including mobile telephone, cleaning materials, travelling (XXXX km / month) and other incidentals.

Since 20XX, the weekly range for the hours worked is XXXX hours per week. The range depends on the guest needs, peak seasons and issues that arise. The line of work is 24 hours a day and 7 days a week. You are on call for emergencies, for example, on XXXX between X-Xpm, you were required to attend to an emergency toilet blockage in a property Xkm from your home.

Numerous positive online reviews of your services were provided, which demonstrated additional services undertaken during your role as property manager.

This is not a hobby, a form of recreation or sporting activity.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 6-5

Income Tax Assessment Act 1997 Section 8-1

Income Tax Assessment Act 1997 Section 995-1