Private ruling: Deduction - accommodation expenses
Date of advice: 13 March 2026
Published: 29 June 2026
Ruling period: Year ending 30 June 2026
Date scheme commenced: 1 July 2025

Ruling: Q1: Are you entitled to a deduction for your accommodation expenses when working away from home under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No.

Relevant facts and circumstances: You are medical professional and maintain a private practice at Hospital 1. You are also employed by Hospital 2 where you perform fortnightly clinical and teaching duties for a few days each week. Your duties at Hospital 2 include supervising fellows, conducting early and late patient consultations, managing surgical lists and overseeing postoperative care. Your duties are regular and integral to your professional role at Hospital 2. When you work at Hospital 2 you and your spouse stay overnight in an apartment owned by a family member. You contend that you stay in City 2 near Hospital 2 for your clinical obligations and consider that your expenses are incurred to enable you to perform duties that cannot reasonably be undertaken from your home near City1. Your home near City 1 is approximately XX kilometres away from Hospital 2. You do not have a rental agreement with the family member; rather, you pay utility and property-related expenses such as electricity, gas, water, council rates, owners corporation fees and land tax for the apartment. You do not stay in the apartment other than when you work at Hospital 2.


Reasons for decision: Summary: You can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable, or it is necessarily incurred in carrying on a business for the purpose of gaining or producing your assessable income, except where the loss or outgoing is capital or private in nature (section 8-1 of the ITAA 1997). Taxation Ruling TR 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses, travel allowances, and living-away-from-home allowances (TR 2021/4) considers the deductibility of accommodation and food. Paragraphs 14 to 15 of TR 2021/4 state: 14. Living expenses are a prerequisite to gaining or producing an employee's assessable income and are not incurred in performing an employee's income-producing activities. Living expenses are also private or domestic in nature. This means that even if these expenses were incurred in gaining or producing assessable income, they still would not be deductible due to the application of paragraph 8-1(2)(b). 15. While living expenses must be incurred before any assessable income can be derived, a loss or outgoing is not incurred in gaining or producing an employee's assessable income merely because it is necessary. This is particularly relevant to living expenses. A person must eat and sleep somewhere, whether or not they engage in employment. Furthermore, paragraphs 25 to 27 of TR 2021/4 state: 25. An employee cannot deduct accommodation and food and drink expenses they have incurred where, due to their personal circumstances, they live far away from where they gain or produce their assessable income. These expenses are living expenses and are not deductible. 26. In these circumstances, the expenses are incurred because the employee's personal circumstances are such that they keep their usual residence, rather than relocate. The occasion of the outgoing for accommodation and food and drink is not found in the employee's income-producing activities, meaning that these expenses are not incurred in the course of gaining or producing the employee's assessable income. They are private and domestic in nature. 27. This also applies where an employee regularly works at a particular location for one or more days each week. A particular location where an employee works regularly is a regular place of work. The issue of expenses incurred in relation to accommodation near the workplace while maintaining a family residence in another location was considered in FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466 (Toms' Case) . In Toms' Case , the taxpayer was a forest worker who during the working week lived in a caravan in a bush camp 108 kilometres from his family home in Grafton. He claimed it was too far to travel each day to his work in the forest, so that it was necessary to establish a caravan at the camp. He would return home on weekends. He claimed the costs of maintaining his caravan and other living expenses such as the cost heating and lighting. The Federal Courts held that the expenses incurred in relation to the temporary accommodation near the workplace while maintaining a family residence in another location were dictated not by his work but by private considerations, and therefore were not deductible. Application to your circumstances Your circumstances are comparable to the taxpayer in Toms' case in that you have chosen to reside at a place far from Hospital 2. The expenses you incur to stay in the apartment near Hospital 2 arise from this choice and not from your income earning activities. The expenses are a prerequisite to the earning of your assessable income and are private in nature. As such, the expenses are not deductible under section 8-1 of the ITAA 1997.

Relevant legislative provision: Income Tax Assessment Act 1997 section 8-1