By David Shaw. 01/08/2016
Travel is one of the areas people ask us about most frequently in relation to their investments. Below we have compiled information from the most common of those questions:
Frequency of Travel
There is an old wives tale that has circulated property investor circles for a long time that you are limited to inspect your property twice a year or on the flip side that you can claim two property inspections regardless of whether you completed them. This is incorrect, there is no minimum or maximum as far as travel to inspect your properties goes but you do have to genuinely complete an inspection and do a full inspection not a drive by inspection. We recommend that you either get a letter from your agent (or tenant) to confirm the inspection or keep the email correspondence with the agent confirming the inspection.
In addition to your usual tenancy inspections you can claim travel in relation to your investment property for the following reasons:
Duration of Travel
- Preparing the property for new tenants except in the case of the first tenants, any travel prior to the first tenancy is capital in nature
- Undertaking repairs in relation to the wear and tear of the investment property due to tenancy
- Performing general property maintenance such as cleaning or gardening
- Travel to collect rent
- Travel to your agent to discuss the property after the first tenancy
The duration of your stay when you visit a property interstate or far away from home is a hotly contested issue. You can only claim the expenses which relate to days in which you were genuinely inspecting, repairing or maintaining your investment property. As such if you complete a rental inspection on one day but you stay in the location for a week it is likely that the ATO will argue that you can only claim the expenses that relate directly to the day of your inspection and they will deny all other expenses including travel to and from your home.
Where the main purpose of your trip is to inspect your property you can claim the travel to and from your destination including airfares, parking etc. However you need to be able to show that the primary purpose of the trip was to inspect your property. In the event that you are staying in your destination for more than one evening you would need to keep an itinerary of what you did in relation to the property each day of your trip. Eg you may have a letter confirming an end of tenancy inspection one day and you may stay an additional day to perform garden maintenance.
Types of claims and written evidence
Below is a list of the normal expenses incurred while travelling to inspect your property and the type of evidence you would need to verify these expenses:
- All expenses- evidence of an inspection occurring such as a letter from the agent or a travel diary
- Airfares- Receipts
- Car Hire- Receipts
- M/V travel in own car- Diary of kilometres
- Fuel for hire car- Receipts
- Purchases while travelling such as meals- Receipts
- Where your travel is 6 or more nights a travel diary must be kept detailing the nature of all of your activities as well as dates, places and times
*The advice published on social media mediums by WSC Group is of a general nature and does not constitute specific financial advice. For a detailed financial strategy you should consult with a qualified financial advisor before making any investment decision.
David Shaw is the CEO of WSC Group: Certified Practising Accountants and Business Advisors, and
was voted Property Tax Specialist of the Year in the Your Investment Property 2013 Readers Choice Awards (as well as runner up in 2012, 2014 & 2015).
Disclaimer: while due care is taken, the viewpoints expressed by contributors/sponsors do not necessarily reflect the opinions of Your Investment Property.
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