Consumer News

Rethink needed on deductions

25 July 2017

By Tim McKibbin – REINSW CEO

Changes to allowable deductions for travel to inspect a residential investment property will adversely affect investors and need to be reconsidered.

The Federal Government announced the changes in the 2017 Budget, which means an investor who travels to inspect residential investment property cannot claim deductions for their annual site inspection. However, an investor who owns a commercial investment property can.

This was brought in to curb abuse of deductions, but there are other measures the Australian Tax Office can use to identify questionable claims.

It is also contrary to the principles of a good tax system, which includes the principle of neutrality and treating two tax payers in similar circumstances the same.

Unfortunately this may result in residential property investors only buying in their home town.