What can real estate agents claim at tax time?

July 26, 2020
renting privately without an agent

As a real estate agent there are several tax deductions you may be entitled to claim this June 30. To maximise these deductions, it’s important to organise your records and receipts before lodging your annual return.

You’ll need this documentation to substantiate any work-related expenses, income from retainers and commission earned. For this reason, it’s important to have a dedicated folder or place to easily record your income and expenses.

So, what can real estate professionals claim?

Home office costs

For those working from a home office, there are a number of work-related expenses that are tax deductible.

modern and bright home office

The Australian Taxation Office (ATO) allows employees working from home to claim office furniture depreciation, work-related phone and internet costs, electricity and insurance.

With equipment such as computers and phones, if the purchase price was less than $300 you can claim a full deduction for any work-related portion.

Car and travel expenses

The ATO allows real estate professionals to claim vehicle and other travel expenses incurred in the course of performing work duties, excluding general travel between home and work.

As an agent or property manager, you might also be eligible to claim a deduction for the travel between your workplace and properties where you are conducting inspections or open homes.

In addition, you may able to claim a deduction if you are travelling from your home to an alternative workplace and then onto your normal workplace or directly back home. This alternative workplace could be another branch of the business or a head office where you don’t normally work.

It’s important to note that these deductions apply to real estate professionals who use their own vehicle to perform work-related duties. If a work car is provided, the deductions no longer apply.

A good way to calculate your car expenses is to keep a logbook of the kilometres travelled. Your accountant will advise you on the deductions available as a result of this logbook.

Clothing and uniforms

Clothing and laundry expenses are often misunderstood at tax time. To claim a deduction for uniforms and clothing, it needs to be either a compulsory uniform, a corporate wardrobe or protective clothing and footwear you’ve had to purchase.

A compulsory uniform can be a single item of distinctive clothing with the employer’s logo such a tie, skirt or shirt. To claim a deduction for your clothing expenses you must have written evidence such as a receipt.

business woman working on computer

Along with uniform expense, you may be entitled to claim for laundry and dry cleaning. You must have written evidence, such as diary entries and receipts, for your laundry expenses if both the amount of your claim is greater than $150 or the amount your total claim exceeds $300.

Phone expenses

If you have a phone entirely for employment purposes and the cost of owning it is not billed or reimbursed by your employer, then you’re entitled to claim all related expenses as a tax deduction.

If you use your phone for both private and business purposes, you can only claim for the work-related proportion of your phone calls.

Your accountant may ask for an itemised account of all calls made to evaluate the true costs, or they may be able to make a good estimate based on diary records kept over a minimum of a four-week period.

close up of businessman on mobile phone

Other expenses

There are other expenses you might be able to claim including cameras, registration certificates (excluding the initial certificate of registration), advertising you’ve paid for yourself (excluding those on a fixed salary) and gifts bought for clients.

Before putting in expenses to your accountant, there are a few things you need to remember:

  • You must have spent the money yourself and not been reimbursed
  • The expense must be directly related to earning your income
  • You must have records to substantiate claims

Understanding the ATO rules and regulations and organising your documents accordingly will help you maximise your tax refund.

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