Private ruling: Rental property expenses
Published: September 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for the expenses you incurred relating to the storage of your personal belongings? | A1: No

Relevant facts and circumstances: You had furniture and other items removed and transported to a storage facility so that you could rent out your home. Apart from the removal expenses you incur a monthly storage cost.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1.

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature. In order to derive assessable income from your property, you chose to store your personal belongings at a cost. The removal of personal belongings from your property can be seen as simply a pre-requisite to the earning of assessable income from the property. That is, the storage expenses are not considered to be incurred in the course of earning rental income. Also, while your requirement for this storage may be seen to be an indirect consequence of the renting of your house, the expense remains private or domestic in nature. Accordingly you are not entitled to a deduction for the removal and storage expenses.

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