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Property education deductions

Discussion in 'Accounting & Tax' started by joshjblakeley, 19th Jun, 2015.

  1. joshjblakeley

    joshjblakeley New Member

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    Brisbane
    Hello all, this is actually my first post but have been reading through the Somersoft forums over the last few months and really appreciate the knowledge everyone has contributed as we are currently looking to purchase our first investment property.

    I am wanting to see if it was possible to claim property education (property meeting expenses, property course costs) as a tax deduction if we have boarders living with us in our PPR. I have been advised that you cannot claim these expenses until you own an investment property. If it is not possible with boarders should we look at instead charging it as rent to claim deductions?

    Thanks!
    Josh
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Normally spruiker type courses are not deductible in full even if you do own an investment property. But with boarders no expense is deductible at all so definitely not deductible.

    ATO ID 2003/324
    Income Tax
    Deductions: rental property expenses: property investment seminar
    http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2003324/00001

    The taxpayer is entitled to a deduction under section 8-1 of the ITAA 1997 for expenses incurred in attending a property investment seminar but only to the extent that the expenses relate to the gaining or producing of assessable income from their existing rental properties.
     
  3. joshjblakeley

    joshjblakeley New Member

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    Ok thanks for your quick and clear reply Terry!
     
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Boarding income may well be assessable and some share of ownership costs would then be deductible.
    https://www.ato.gov.au/general/property/your-home/renting-out-part-or-all-of-your-home/

    However some boarding arrangements lack the commercial intent needed to define it as income. eg http://law.ato.gov.au/atolaw/view.htm?DocID=AID/AID2001381/00001&PiT=99991231235958 and the amount charged may represent a token contribution to running costs , food etc. eg two flatmates pay $ to Joe who owns the property is different to the position of a share flat rented by Joe and each persons is just paying a share of notional costs.

    Note that the homestay programme is a defined programme and this ruling wont apply to taxpayers who just list a vacant bedroom and call it board. Board is a cost that includes food and utilities.