Gifts to tenants – are they deductible
In broad lay language, the basics of tax law says that if you spend money to generate income (rental), then you can claim the expense as a deduction against the rental income – where there is a direct income.
Landlords love tenants who pay their rent on time, stay for a long time in the property and look after the property.
Some landlords love tenants like this and in trying to minimise tenant turnover, they give them a small gift at Christmas. For example movie tickets.
In my opinion, you can claim as a deduction, the cost of these movie tickets or equivalent low cost gifts.
Based on the principle, if you estate agent is doing a good job and the landlord rewards them with a small gift, then the cost of that expense is also deductible.
Don’t forget to get a receipt to substantiate the cost in case of a tax audit. But also to help you compile your information for your accountant at tax time.
Property Tax Specialist clients receive templates to help them compile their information before emailing it across to us to prepare their tax returns, This helps minimise our time and their cost of preparation.
Please note that every effort has been made to ensure that the information provided in this guide is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to property buyers and investors. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal, tax or investment advice. You should, where necessary, seek your own advice for any legal, tax or investment issues raised in your affairs.