Private ruling: Rental property expenses
Date of advice: 21 November 2016
Published: March 2017
Ruling period: Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for the cost of leasing furniture for your rental property? | A1: Yes.


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. A deduction is generally allowed for expenses incurred in maintaining a rental property which is rented at market rates. Where furniture or white goods are leased for the purpose of putting them into your rental property, the associated expenses are an allowable deduction. This is because the expenses are sufficiently connected to the earning of your assessable rental income. That is, the cost of leasing the items is helping you earn your assessable income. Therefore you are entitled to a deduction for the cost of leasing furniture and/or white goods that are put in your rental property and used solely for the purpose of earning your assessable rental income.

Relevant facts: You are buying an apartment and wish to rent it out. | You want to offer the tenant the option of having a fully furnished or partly furnished apartment. | You wish to lease the required items such as dishwasher and furniture. | The items will only be leased if the tenant requires them. | All items will be used only in the rental property. | The items will not be used for private purposes. | The property will be rented at market rate.