Travel Expense Claims Not Allowed From 1 July 2017
For many small investors who have purchased investments properties over the years in an effort to create a nest egg, the good news coming from the Federal Budget 2017-2018 was that there would be no changes or limits placed on negative gearing.
However, the bad news that a lot of people haven’t heard about yet, that will take effect from 1 July 2017, is the removal of claimable deductions for travel expenses relating to inspecting, maintaining or collecting rent for a residential rental property. For some, purchasing a rental property in a far-removed location (which may co-incidentally be a lovely holiday spot) was a win-win situation that many took advantage of – living in Mt Isa, “maintaining” the rental property at the Gold Coast in the middle of summer!
Step into the 2017/2018 financial year and the availability of travel expense claims twice a year has now been removed – for some that equates to a sizeable deduction evaporating without warning. Some investors may be questioning the viability of their investment property.
At this time you need to consider your investment strategy and the reasons why the investment was purchased in the first place:
Long term growth (capital gain) and/or cash flow (rental income).
It is important not to panic or have a knee-jerk reaction when sweeping changes such as this occur. Seeking out sound financial advice around the potential implications for your investment property and your goals is vital.
So while you mull over the potential impact on your finances (if any) there IS one deduction for travel that is still allowed. The cost to manage your own tax affairs, which includes travel to meet with a recognized tax adviser, is still a claimable deduction – so make an appointment to see them today (Bundaberg has some lovely beaches that you can visit any time of year)!
You can also find The Money Edge in Bundaberg which is famous for Bundaberg Rum, Mon Repos Turtle Centre, Bundaberg Brewed Drinks, the Bert Hinkler Hall of Aviation and so much more!!!
Kath Clarke | Bookkeeper | The Money Edge | Bundaberg