Claiming Travel For Tax Deductions

Let's say you own an investment property that is some distance away from where you live. Can you claim the travel expenses you incur when visiting the property as a tax deduction? Yes, you are allowed to claim travel expenses incurred in producing assessable income but there are limitations.

The expenses you can claim not only include transportation costs (including car running costs and depreciation), but also include the cost of meals and accommodation if the property is a long distance away. Deductible travel will generally include:

(a) Preparing the property for new tenants
(b) Collecting the rent
(c) Inspecting the property
(d) Maintaining or repairing the property

Some travel expenses are NOT deductible but may form part of the cost base of the property, such as:

(a) Travel expenses to inspect properties to purchase
(b) Travel to purchase a property
(c) Travel to undertake improvements to the property (i.e. more than just repairs)

Does that mean if you have a property interstate that you get to write off your holidays?

Unfortunately the answer is no. Travel expenses must be reasonable. This means that you can't go for 10 days to inspect a property - you must have the predominant reason for travel to inspect your property and if you take some private holiday time then you need to apportion your expenses. It is likely that if you went to inspect the property once a year for 2 days it may be deductible, but if you go 3 times a year and / or you go for 10 days on a trip it is unlikely to be fully deductible.