Inland Revenue Target Real Estate Expense Claims

Written by
MBS Advisors
Published on
May 19, 2021

Recently Inland Revenue have started a Real Estate Sector Campaign to investigate the level of expenses agents are claiming against their income.

Expenses that are directly related to your business include real estate licenses, advertising and marketing, ACC, wages and accountancy. Other expenditure relating to training conferences and seminars relating to the industry are also deductible.

One of the expenses in the spotlight are business vehicle expense claims and how these are calculated. An issue arises where the vehicle is used for both business and private use. In this case it is important to assess whether a logbook has been kept to determine the percentage of business use. A logbook is required to be kept for 90 days and should be renewed every three years.

Business clothing can be claimed which is ‘distinctive work clothing’. The clothing typically has a business logo or advertising embroidered on it. Normal work clothing without a logo are not a deductible expense, nor are other personal grooming products.

Client gifts are able to be claimed but agents need to be careful where this includes personal or entertainment expenses. It is best to keep a record of who the gifts and entertainment are purchased for to prove a link between the expense and income earned.

A commonsense approach will usually see the correct deduction claimed.

Share this post
Blog

Explore our latest articles

Enjoy our latest news and blog posts

5 min read

Support for Farmers

Farming can be tough and unpredictable. That’s why having the support - financially and holistically - is key. Here are some helpful ways you can access assistance during the ups and downs. The Farm Debt Mediation Scheme Farmers under financial strain will have access to extra support and guidance from...
5 min read

Which business expenses can you claim against tax?

Incurring expenses is an unavoidable fact of running a business. But which expenses can you claim tax deductions against and which don’t meet the tax-free criteria? Here’s our lowdown on which expenses you can claim against tax. Which business expenses can you claim deductions against? If your business expense is...
5 min read

Claiming Expenses for Non-Breeding Bloodstock

Taxpayers that breed horses as part of their business can claim expenses for non-breeding bloodstock that may be used for racing. If, as part of your breeding business you have bred a colt that is subsequently gelded for racing, you will need to apply to Inland Revenue to claim further...

Stay updated and sign up to our newsletter

By clicking Sign Up you're confirming that you agree with our Terms and Conditions.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.