The Federal Government is cracking down on negatively geared landlords who claim travel expenses when they inspect their properties.
The travel perk has been taken away in the Budget, which the Government says will raise $800 million in revenue over four years.
Treasurer Scott Morrison says the Government is trying to keep housing taxes to a minimum while still adding to the Budget bottom line.
“Mum and dad investors will continue to be able to use negative gearing, supporting the supply of rental housing and placing downward pressure on rents,” he said.
The clampdown will mean tax deductions by landlords for travel to inspect, maintain or collect rent will no longer be allowed.
According to the Budget the measure is ‘an integrity measure to address concerns that many taxpayers have been claiming travel deductions without correctly apportioning costs that were for private travel purposes’.
On top of the travel perk ban, the Government will also limit the amount that can be claimed for the depreciation of plant and equipment, which are things like dishwashers and ceiling fans.
The changes have begun immediately with existing investments grandfathered until the investor no longer owns the asset or it reaches the end of its effective life.