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

Ruling: Q1: Are you entitled to a deduction for expenses incurred in having a representative attend the hearing on your behalf? | A1: Yes.

Relevant facts and circumstances: You own a property. Your spouse's name is not on the title of the property. You and your spouse had lived together in the property since your marriage. You moved interstate and began to rent out the property. Your property was maliciously damaged by the tenants. There was a hearing in relation to the damage. You were unable to attend the hearing; your spouse attended on your behalf. You paid for your spouse's travel expenses to attend the hearing.

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. Rental property expenses are deductible under section 8-1 of the ITAA 1997 for the period the property is rented or is available for rent. Generally, the cost of travel to inspect or maintain a rental property is an allowable deduction under section 8-1 of the ITAA 1997 as it has been incurred in connection with gaining income from the investment property. Similarly, travel expenses incurred in relation to attending legal matters involving a rental property would also be considered to be incurred in gaining or producing assessable income. In your case you were unable to attend the hearing in relation to the damage caused at your rental property. You incurred expenses to have your spouse travel to the hearing as your representative. Even though it was your spouse who travelled to attend the hearing, it was you that incurred the expenses. Accordingly, you are entitled to a deduction for the expenses under section 8-1 of the ITAA 1997.

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