From 1 July 2017, the Government will disallow deductions for travel expenses related to inspecting, maintaining or collecting rent for a residential rental property.
This is an integrity measure to address concerns that many taxpayers have been claiming travel deductions without correctly apportioning costs, or have claimed travel costs that were for private travel purposes. As part of the Government’s strategy to improve housing outcomes, this measure will provide confidence in the tax system by ensuring tax concessions are better targeted.
This measure will not prevent investors from engaging third parties such as real estate agents for property management services. These expenses will remain deductible.
This measure is estimated to have a gain to revenue of $540.0 million over the forward estimates period.