The 2017 budget has seen a major change that will impact current and future residential rental property owners. From 1 July 2017, deductions for travel expenses related to:
- Maintaining or;
- Collecting rent for a residential rental property will be disallowed.
This has been implemented to address concerns that rental property owners have been claiming travel deductions without correctly apportioning costs, or have claimed travel costs that were for private travel purposes, an issue that is estimated to cost the government around $160 million a year. This measure will not prevent rental property owners from engaging third parties for property management services, as these expenses will remain tax deductible. This change also does not apply to commercial property; it is related purely to residential property. The change means that the 2017 financial will be the final year you are able to claim travel expenses as a legitimate deduction against your rental property. Author: Ashleigh Truran-Johnson