Residential rental property travel expenses
From 1 July 2017, travel expenses relating to a residential investment property are not deductible.
Under the new legislation, you are no longer able to claim any deductions for the cost of travel you incur relating to a residential rental property unless you are carrying on a business of property investing or are an excluded entity.
In the business of property investing
Generally, owning one or several rental properties will not be considered being in the business of rental properties.
The receipt of income by an individual from the letting of property to a tenant, or multiple tenants, will not typically amount to the carrying on of a business as such activities are generally considered a form of investment rather than a business.
Excluded entities
An excluded entity is a:
- corporate tax entity
- superannuation plan that is not a self-managed superannuation fund
- public unit trust
- managed investment trust
- unit trust or a partnership, all of the members of which are entities of a type listed above.
Example: An individual with residential investment property in 2017-18
Sarah rented out her residential rental property 2017-18. She travelled to the property to repair damages caused by tenants during the year.
As the investment is a residential property, Sarah cannot claim travel expense.
