Top 10 Forgotten ATO Real Estate Tax Deductions

Top 10 Forgotten ATO Real Estate Tax Deductions
Posted by
on Aug 26, 2019

An analysis of Australian Taxation Office (ATO) data revealed that real estate agents claim an annual average of $8,634 in real estate tax deductions. This is triple the national average of $3,413 and ten times that of shop assistants.

As a real estate agent, there are obvious deductions for work-related travel, advertising, mobile phone, licencing and home office expenses. However, there are many more deductions that are commonly overlooked. To help maximise your tax return, we’ve compiled a list of the top 10 forgotten ATO real estate tax deductions:

1. Gifts and greeting cards

Commonly Forgotten ATO Real Estate Tax Deductions Presents

If you’re an agent or property manager who is entitled to earn a commission, you can claim a deduction for gifts and greeting cards that you’ve purchased for work purposes i.e. for your tenants, owners and suppliers.

These gifts may include hampers, bottles of wine and whisky, gift vouchers, perfume, flowers and pen sets. You cannot claim entertainment gifts such as tickets to the theatre, movies, plays, sporting events, amusement centres or holiday vouchers.

2. Property presentation costs

If you’ve spent money getting a property ready for an open home and haven’t been reimbursed by your employer, you can claim a deduction on property presentation costs. This includes costs associated with cleaning the property and the purchase of decorative elements such as flowers and plants.

3. Advertising costs

Similarly, you can claim a real estate tax deduction for your advertising costs, but only if you’re an agent or property manager who is entitled to earn a commission and you haven’t already been reimbursed by your employer. This includes costs associated with advertising through newspapers, letterbox drops, signage and bunting.

4. Marketing equipment

Commonly Forgotten ATO Real Estate Tax Deductions Marketing Equipment

As a real estate agent, you can claim a deduction on the work-related portion of any marketing equipment which was used or purchased in the last financial year. This includes drones, professional cameras and virtual reality goggles that are used for work as well as any repair costs associated with those items.

If you spent $300 or less on a piece of marketing equipment and you used it for work only, you can claim the full cost of the item. However, if the item was more than $300, you can claim a depreciation deduction.

5. Tax agent fees

Commonly Forgotten ATO Real Estate Tax Deductions Tax Agent

Did you use a registered tax agent or online service such as Etax.com.au to prepare and lodge your tax return last year?

If so, you can claim on the fees that you paid in section D10 (cost of managing tax affairs) of your tax return. Additionally, if you met with a recognised tax advisor, you can claim on the fees charged and the associated travel expenses.

6. Handbags, satchels and briefcases

You can claim a deduction on your handbag, satchel or briefcase if you use it to carry work-related items such as laptops, iPads, documents and stationery to and from work. However, it must be used primarily for work and should be a reasonable amount of your business revenue.

If you use your handbag, satchel or briefcase outside of work, the ATO recommends you keep a log of when you use it privately versus when you use it professionally. Come tax time, this will help you calculate the portion which is tax deductible.

7. Self-education expenses

Self-education is often overlooked when it comes to real estate tax deductions. If you’re studying a work-related course that leads to formal qualification, you can deduct a portion of the course fees.

The ATO states that the course must “maintain or improve specific skills or knowledge you require in your current employment”. This means you can take a course on marketing to learn how to grow your rent roll or enrol in a real estate photography class. As long as you can prove that the training will help you expand your real estate business or career, it’s likely you can claim it.

Additionally, you can deduct certain expenses related to your course such as the cost of travelling to and from class, phone calls, stationery and textbooks.

8. Subscriptions to industry publications and newspapers

Commonly Forgotten ATO Real Estate Tax Deductions Publications

One of the most commonly forgotten real estate tax deductions is subscriptions to industry publications and newspapers. As a rule of thumb, the content of the subscriptions must be connected to the duties carried out by you as a real estate agent. For example, you can claim on real estate publications like Elite Agent, Your Investment Property, AFR Weekend or newspapers that have property sections.

However, if the property section of the newspaper only appears in the Monday, Wednesday and Friday issues, you can only claim a tax deduction for those issues rather than for the entire subscription.

9. Clothing, laundry and dry cleaning

Commonly Forgotten ATO Real Estate Tax Deductions ClothingSource: ATO

If you’re required to wear clothing that is unique and distinctive to your real estate office, you can claim on the purchase and upkeep of those items of clothing. This might include blouses, pants, shirts, jumpers, dresses and skirts that have your office’s logo on them or even distinctive shoes, socks and stockings that are specified in your office’s uniform policy.

To claim a deduction, you must provide written evidence of your clothing purchases and laundry and dry cleaning expenses. It’s also likely that you’re able to claim mending and alteration costs for those items of clothing.

10. Donations

If you’ve donated $2 or more to an approved organisation or registered political party in the last financial year, you may be able to claim it as a tax deduction. Your donation receipt should indicate whether or not it’s tax deductible. Additionally, you can claim a deduction if you’ve made a net contribution of more than $150 to an approved organisation for a fundraising event.

Note that you cannot claim a deduction for a donation if you’ve received something in return. For example, if you received raffle tickets or novelty items in exchange for a donation.

To recap…

The top 10 forgotten ATO real estate tax deductions are:

1. Gifts and greeting cards

2. Property presentation costs

3. Advertising costs

4. Marketing equipment

5. Tax agent fees

6. Handbags, satchels and briefcases

7. Self-education expenses

8. Subscriptions to industry publications and newspapers

9. Clothing, laundry and dry cleaning

10. Donations

Be sure to check the ATO for a complete list of general tax deductions and more specifically, real estate tax deductions.

Hopefully this blog post on the Top 10 Forgotten ATO Real Estate Tax Deductions has helped you maximise your tax return. You might also be interested in 41 Property Managers Tell Us Their Favourite PropertyMe Feature, How Much Could Your Business Save With Cloud Software? and The Future of the Real Estate Industry.

PropertyMe is Australia’s largest and most complete cloud property management software. Learn more about how you can save time and money with automated workflows today.

Please note that this blog post has been prepared for informational purposes only. PropertyMe does not provide tax advice; be sure to consult your tax advisor before engaging in any transaction.

Did we miss any other commonly forgotten ATO real estate tax deductions? Please email to let us know.