The end of the financial year is here and with it, the speedy collection of all receipts and invoices that you can claim in your tax return. Work related expenses are top of mind, yet you may be missing out on a window of opportunity when it comes to claiming your RV or tow vehicle expenses.
Please note that this article is not financial advice and you should always seek counsel from your registered tax agent before going ahead with any tax deductions. This article does not take into account your individual circumstances and/or expenses.
Must be work-related deductions
As you’d expect, you’re only able to claim tax deduction on your RV if you have used it to earn income. Unfortunately, those weekends away from work relaxing do not count as grounds for claiming a deduction. Your expenses need to be apportioned, removing private use, including any use by yourself, your family, your relatives and your friends that was free of charge.
Having said that, there are legitimate circumstances whereby you can claim. We’ve mentioned a handful below that you can keep in mind for this end of financial year taxation period.
Renting out your RV
When you’re not using your caravan year-round, it may have crossed your mind to rent it out to travellers who are looking to hit the road.If this is the case, you may be able to claim expenses! These can include cleaning costs between customers, transport fees to the person renting and usage fees the customer has racked up such as petrol and tolls. According to the ATO, you can claim expenses for income tax purposes as long as they are directly related to the renting of your caravan or RV and you keep records such as receipts to back up your claims.
Advertising your RV
If you’re running ads on social media platforms, paying to host a marketing website or printing pamphlets to leave in letterboxes, you also may be eligible to claim a deduction of these advertising costs.
If you hadn’t thought about this option before and are now considering it for the next financial year, find out how to make money from your caravan when it’s not in use.
Consider the discounts
As tempting as it is to provide ‘mates rates’ for your friends and family, if your caravan or RV is rented out at below-market rates, your deductions are limited up to the amount of the income you receive.
If you have a small business and you use your RV or tow vehicle to travel for work, as accommodation or a mobile office, you’ll be able to claim these expenses as a business deduction too.
Make sure to check all the boxes
If you purchased your caravan purely for a stream of income, the ATO specifies that you must:
- Advertise it widely so it will attract users and respond to enquiries in a reasonable period
- Make it available during peak periods when people want to rent it
- Ask for a fair rent comparable to other listings
- Ensure it’s in a location and condition that will make it likely to attract tenants
- Not refuse to rent it to interested people without adequate reasons
Creating an income stream with your caravan is a great and unique opportunity for many in the outdoor adventure space. As with any tax deduction, make sure to document all of your expenses, as well as seek advice from an accountant before making any claims.