Landlords - Non-deductible Expenses

Some costs at the time of purchase of a rental property may never be deductible.

A recent interpretation by the Australian Taxation Office, regards travelling or accommodation costs relating to initial repairs on a property as excluded from any claim.  This opinion is that the travel etc is not a deduction as a repair, nor as a travel expense nor even as part of the capital cost of the property.  This becomes one of those costs known as ??black hole expenses??.

This is despite the repair itself being part of the capital cost of the property.

The recommendation is to avoid travelling to do the repair yourself ?? have a local tradesman attend to it.  At a subsequent time, travel and accommodation will be allowed, to make repairs, attend body corporate meetings, visit agents, etc, subject to a ??reasonableness?? test.  Your tax adviser is the best person to help ?? but ask before assuming.

< back to Latest News