There is a common misconception that just because you have an investment property or are thinking of purchasing one, that you can attend these seminars and then claim a tax deduction for the cost of doing so.
What does the tax law say?
An expense is generally allowed as a tax deduction if it is incurred in generating income – in this case rental income.
So, what are the key factors in assessing deductibility?
- Ownership – you actually need to own an investment property.
- Income – you must actually be earning rental income.
- Nexus – there must be a connection between the expense and the earning of the income, e.g. you can claim a deduction for agent fees or rates when you earn rental income.
In reality what does this mean?
|If the program/seminar relates to…||Tax Deduction?|
|Increasing wealth / capital grow of properties||No deduction|
|Acquiring / sourcing properties||No deduction|
|Improving the value of your property||No deduction|
|Improving rental income||Yes deductible|
|Getting better tenants / avoiding bad tenants||Yes deductible|
|Better property management by agent/you||Yes deductible|
|Carrying out repairs (not renovations)||Yes deductible|
|Choosing and/or managing tradespeople||Yes deductible|
|Accounting and tax advice for rental properties||Yes deductible|
|If a mix of the above||You must apportion*|
* to determine the deductible proportion, review the brochure and check the topics or ask the presenters for a split.
We are a small business accounting service located on the beautiful Sunshine Coast and would appreciate the opportunity to help you, your friends, family and colleagues. Contact us on 07 5451 1118 for an obligation-free confidential discussion today.