Private ruling: Deductions for losses and outgoings relating to an additional property
Date of advice: 18 December 2018
Published: April 2019
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the costs that you incurred for the ownership and maintenance (council rates, water rates, body corporate fees, general maintenance) of the Apartment allowable deductions? | A1: Yes. The Commissioner considers that your situation meets the requirements in Draft Taxation Ruling TR 2017/D6 – Income tax and fringe benefits tax: when are deductions allowed for employees’ travel expenses? (TR 2017/D6). The expenses are deductible to the extent that they are incurred in gaining or producing your assessable income and will need to be apportioned. | Q2: Are you entitled to claim a deduction for 100% of the interest incurred on the loan to acquire your ownership share in the Apartment? | A2: Yes. As the purpose of the loan is to acquire your ownership share of the Apartment the total amount of interest incurred on the loan is deductible; notwithstanding that the loan was taken out in joint names with the co-owner. | Q3: Are you entitled to claim the running costs (electricity and gas) for the Apartment to the extent that the property is used to gain or produce your assessable income? | A3: Yes. You use the Apartment when you are travelling for work and for private purposes. To the extent that you use the Apartment for work-related travel you are entitled to a deduction for the running costs.

Relevant facts and circumstances: Employment You are an employee. Your role requires you to undertake travel which requires you to sleep away from home overnight. Your travel is an expected part of your work responsibilities. You do not receive a travel allowances. The salary that you are paid incorporates all aspects of your employment, including travel. Travel You have a professional office. This office is XXXX kilometres from the CBD. When you are required to you attend the CBD office. There are other members of your team located elsewhere. Your team provides technical support to staff in regional offices and this requires you to travel. This involves travel commitments including regular travel to other specified locations and less frequent travel to other specified locations. You work away from home for relatively short periods of time. To illustrate this, in the 20XX income year you regularly travelled to three or more work locations in any given week. You have kept a detailed travel diary of your work travel away from your primary place of residence/office for the 20XX income year which includes the private use of the Apartment. Residences You have maintained your primary residence for the past XX years. You and your spouse purchased the Apartment as tenants in common. You purchased an interest in the Apartment on the basis that you would occupy the property as accommodation while travelling for work. You and your spouse took out a loan in joint names which was used solely to fund your ownership interest in the Apartment. Your spouse funded their share of the Apartment entirely from their own resources. Your intention when you purchased the Apartment was to have a permanent base located equidistant between the airport and the CBD office. By maintaining the Apartment you could leave work documents, computers, work clothing, food and groceries etc. in the one location without concern for packing and relocating. The Apartment avoided the costs of hotel accommodation when you work in the CBD or are preparing to travel elsewhere for work purposes. You incurred ownership, maintenance and running expenses.

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