Edited version of private advice

Authorisation Number: 1052043339017

Date of advice: 24 October 2022

Ruling

Subject: Rental deductions

Question

Can you claim a deduction for your share of the cost of internet as a rental property expense?

Answer

Yes. The internet expense you incur relates to your rental property and is deductible for the period your property is rented or genuinely available for rent. You need to apportion the expense if you use the internet service for private purposes.

You claim the deduction in proportion with your legal interest in the property at "Total other expenses" label in your tax return. Further information about rental property expenses can be found by searching 'QC 23633" on ato.gov.au.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You and your spouse own a rental property at XXXX (the property) as Joint Tenants.

The property was either tenanted or was available for rent for the whole of the income year ended XXXX.

The lease commenced on XXXX.

In order to attract potential tenants, you provided an NBN internet service (internet) and had the real estate advertise the property as having "free internet".

During the time of tenancy, you paid the internet charge on the rental property for the duration of the tenancy, for the internet service.

The internet service was attached to a phone number. However neither you nor the tenants used the telephone service, only the internet service.

In the income year XXXX, you claimed $XXXX under the "Stationery, telephone and postage" expense label. The amount represents XX% of the total internet expense. The other XX% is being claimed by your spouse.

You have the tax invoices and other records to support the claim for the internet expense.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1