Claiming airfares against your Aussie tax.
Australian property tax and expatriate tax expert STEVE DOUGLAS explains the grounds under which you can recover airfares back to Australia.
Q Can I claim my airfares back to Australia against my tax?
A Yes, you can claim the cost of travelling to Australia against your tax provided you’re collecting rental on an Australian property. And to justify your claim, part of your trip must be spent inspecting the property. When deciding how much of the airfare you can claim, the Australian Taxation Office looks at the main reason for your trip. If the primary purpose of the trip was property related – such as overseeing a tenant changeover or major repair works – you are able to claim your airfare in full. You can also claim other travel expenses for hotels, meals, car hire and other associated costs for the relevant number of days of property-related activity.
Trips made to find or acquire a property can offset future capital gains only when the acquired property is eventually sold. However, if you’re already collecting rental the trips are claimable against your annual income tax. If the trip has a dual purpose, such as returning to Australia to visit family over Easter while also tending to your property, you can claim your airfare on a pro rata basis. So for example, if you spend two days of a 10-day trip attending to your property, you can only claim 20 percent of your airfare and two days of hotel and meal costs against your Australian income tax returns.
If you’re travelling with other family members, you can only claim their expenses if their names are on the property title. For the record, it’s not worth putting your kids on the title to boost this claim as it can create all sorts of subsequent problems. To ensure your claims are lodged without any hiccups, keep a simple diary to confirm your activities and keep receipts of your airfare and other expenses. Frequent Flyer tickets can only be claimed for the actual cost of the ticket, which is usually just the airport tax. The implied ticket value cannot be claimed. There’s no maximum number of trips you can claim in any year, so each visit is eligible for a deduction as long as it’s justified.
