Top 5 Forgotten ATO Real Estate Tax Deductions

Top 5 Forgotten ATO Real Estate Tax Deductions
Posted by
on Aug 08, 2017

A new analysis of Australian Taxation Office (ATO) data revealed that real estate agents claim an annual average of $8634 in real estate tax deductions. This is triple the national average of $3413 and ten times that of shop assistants.

As a real estate agent, there are obvious deductions for work-related travel, advertising, mobile phone 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 five forgotten ATO real estate tax deductions:

1. Gifts

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

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. Tax agent fees

Did you use a registered tax agent or online service such as 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. 

3. 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 that 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 proportion that’s tax deductible. 

4. 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 that you can take a course on marketing to learn how to grow your rent roll. 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.

5. Subscriptions to industry publications and newspapers

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One of the most commonly forgotten real estate tax deductions is subscriptions. As a rule, 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. 

To recap…

Here are the top five forgotten ATO real estate tax deductions:

  • Gifts
  • Tax agent fees
  • Handbags, satchels and briefcases
  • Self-education expenses
  • Subscriptions to industry publications and newspapers

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 5 Forgotten ATO Real Estate Tax Deductions has helped you maximise your tax return. You might also be interested in How To Grow Your Property Management Business Using Facebook, How Much Could Your Business Save With Cloud Software? and Three Rent-bidding Apps to Disrupt Australian Rental Market.

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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 let us know in the comments below.