Rent Taxable?

Discussion in 'Accounting & Tax' started by Stegve, 19th Nov, 2020.

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  1. Stegve

    Stegve Well-Known Member

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    Hi,
    My wife and I are throwing a few ideas around and the following has come up.

    If we were to rent a place to live in can that rent be claimed as a tax deduction if we manage our own investment property/properties?

    Many thanks
    Steve
     
  2. JasonC

    JasonC Well-Known Member

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    No. The expense is private in nature and nothing to do with the investment properties.

    Regards,

    Jason
     
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    With these sorts of things just think, if it was possible why isn't everyone doing it?
     
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  4. datto

    datto Well-Known Member

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    Maybe people are. They just haven't been caught and are waiting to be told to bend over.
     
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I had a person tell me they were an amateur investor so they didnt think CGT applied to a hobby.
    And then there is claiming ordinary work clothes, meals, public transport, costs to apply for a job etc....
    Truck drivers who claim for sleeping in their own truck
    Shiftworkers who must drive to work as there is no other transport option who want to claim a deduction
    Claiming deductions without evidence as long as each payment is $300 or less.
    Many think if you run a home based business through a company or trust that it / you can claim a share of the rent...

    The other big mistake by property owners is to borrow (equity) against your investment property and the additional interest is deductible against that property

    Or they move into their own property and report rent received (that isnt actually paid) and deduct expenses leaving a loss. But you cant pay yourself rent.

    Not true, to all the above.
     
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  6. Stegve

    Stegve Well-Known Member

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    Many thanks for everyone's input.
    The question rose out of a conversation with a mortgage broker a few years back.
    He rented whilst managing his investment properties and claimed his rent as a tax deduction.
    I;m now guessing due to running his brokerage business with an ABN allows this deduction. Which has nothing to do with the investment properties.
     
  7. The Y-man

    The Y-man Moderator Staff Member

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    Even if he did, FBT these days will make it completely not worthwhile.
    Same as company cars (for personal use).

    Housing fringe benefits


    The Y-man
     
  8. Scott No Mates

    Scott No Mates Well-Known Member

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    Was he referring to his business entity (a PTY LTD company) leasing from 'his' SMSF property? Or are you referring to his house etc?
     
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  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If you are running a business from home with a separate room set aside with no private use you could claim, potentially some of the rent. If the business is operated by a company this wouldn't be possible unless the part of the property was subleased to the company.
     
  10. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Um no it doesnt. If he is sole trader and owns it perhaps a small portion of ownership costs assigned to a dedicated PLACE of busineess (rather than a home office study ?). And if he has personal services income (common with brokers) it could further impact and be specifically denied. However if its rented premises then the employer must also be on the lease or the ATO wont even allow a % of rent since the business didnt incur any lease expenses. And then care must be taken about FBT.

    Possessing a ABN is irrelevant.
     
    Last edited: 19th Nov, 2020