Private ruling: Accommodation Expenses
Published: August 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for the cost of your rental expenses for your on site accommodation? | A1: No


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 (ITAA 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, or relate to the earning of exempt income. As a general rule, the cost of accommodation is not tax deductible, as it is essentially a living expense which is considered to be a private or domestic outgoing ( Federal Commissioner of Taxation v. Green (1950) 81 CLR 313; (1950) 9 ATD 142; (1950) 4 AITR 471). However, where a taxpayer is required by his or her employer to reside for periods of time, away from home and at the work site, and that employee incurs expenditure for the cost of sustenance, the expense takes on the character being business or employment related ( Roads and Traffic Authority of NSW v FC of T 93 ATC 4508;(1993) 26 ATC 76). In your case, you live with your spouse on site in rented accommodation. You have no other home that you are maintaining and so you are not travelling away from home. You have established a home on site. Even though it is a requirement as part of your employment agreement that you live on site, the essential character of the expenditure is of a private or domestic nature. The accommodation expenses are a prerequisite to the earning of your assessable income and are not expenses incurred in the course of gaining or producing income Therefore, you are not entitled to a deduction for your accommodation expenses under section 8-1 of the ITAA 1997

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You are employed at an educational institution and it is a condition of your employment that you live on site. | You are required to live on site so as to be available to students at call. | You live on site fulltime with your spouse and have no other home to go to. | Your employer charges you for the rental of the property and it is paid from your after tax income.