Real Estate Professional Tax Return and Deduction Checklist

Before you know it each year, tax season rolls around again. But don’t despair! It’s actually a great time of year – if you know how to make the most of it. And our expert tax consultants definitely know how to get the very best results from your tax return. 

The important thing is to work out all the expenses and deductions that relate to costs you’ve incurred in your job as a property manager or salesperson, so you can get the highest possible refund. 

As a real estate professional, you will most likely get an income statement that will outline all of your salary, wages, allowances and bonuses for the financial year, and this is the starting point for your return. Next come the deductions…

Can I claim any deductions?

You can claim deductions on any money spent during the financial year on products or services that directly related to earning your income. You need to have spent the money yourself (it can’t have been reimbursed by your employer) and you need to keep a record of the expense such as a receipt or invoice. 

What tax deductions can I claim? 

There is a wide range of deductions you can claim when you work in real estate, such as: 

• The cost of advertising (for example, through newspapers, letterbox drops, signage and bunting).  You can't claim a deduction for the cost of advertising if you earn your income from a fixed salary and you aren't entitled to earn commission.
• Car expenses if you need to drive for work related reasons such as attending open houses or inspections, or travelling between different offices owned by your employer (such as between your regular office and the head office to attend meetings)
• The cost of purchasing, repairing and cleaning work clothing if it’s a compulsory uniform that identifies you as working for your employer (for example, if it has a logo)
• Gifts such as hampers, flowers or a bottle of alcohol if they are bought for work purposes (for example, for a client) and you’re a salesperson or property manager who receives a commission
• The work-related portion of any marketing equipment you use, such as a digital camera used for taking photos of properties
• Self education, training or conferences directly related to your line of work, such as a real estate agent licence or certificate

What can’t I claim? 

There are several key expenses you can’t claim, including: 

• Any entertainment such as taking prospective clients to dinner, sporting events or concerts (even if you discuss business when you’re there)
• Any tools or equipment, such as a laptop or camera, if it is provided by your employer
• Self education and training not directly related to your line of work and intended to help you transition to a different career in the future, such as a law degree
• Office clothing such as a business suit or comfortable shoes, even if you only wear them to work

What records do I need to keep?

Record keeping is important and it’s a good idea to create an easy and reliable system to help you keep on top of this throughout the year. You don’t need to keep physical receipts, and it’s acceptable to keep a digital copy (such as a photo of a receipt or an email receipt) provided it is possible to read: 

• The name of the supplier
• Amount of the expense
• Nature of the goods or services
• Date the expense was paid
• Date of the document 

You also don’t need to keep receipts for expenses under $10 (as long as these don’t cumulatively come to more than $200). 

What happens if I make a mistake in my tax return? 

It is essential that you take great care in putting together the information and supporting documentation when filing your tax return, and only claim deductions that are genuine to avoid penalties and possibly even prosecution from the ATO. But we all make innocent mistakes sometimes and if you realise you’ve submitted any incorrect or unsubstantiated claims then you should contact your accountant immediately and they will assist you in making the necessary amendments.

Still have some questions about lodging your tax return? Talk to H&R Block. Our experienced tax consultants will be able to help. Call 13 23 25 for details or find your nearest office and book an appointment online.