This is a common question, especially among individuals who own several rental properties and actively manage them. The key point to understand is that owning multiple properties does not automatically mean you’re carrying on a business of property letting.
In most cases, if you’re an individual who receives rental income—whether from one property or several, including a mix of short-term (like Airbnb) and long-term rentals—you are generally classified as a property investor, not a business owner. Your activities are considered a form of passive investment rather than an active business operation.
The Australian Taxation Office (ATO) is clear on this: you are not in the business of letting rental properties unless your operations are substantial, ongoing, and conducted in a business-like manner. This usually means:
- You have a large-scale operation, possibly involving many properties.
- You have a high level of involvement, systems, and processes similar to a business.
- You may engage employees or a property manager full-time.
- The primary intention is to generate income consistently through business activities.
Because most individual property owners, even those with multiple rental properties, do not meet these criteria, they cannot claim certain deductions such as travel expenses related to managing or inspecting their rental properties. These expenses are only deductible if you are genuinely in the business of property letting—which is rare for individuals.
In summary, having many properties doesn’t necessarily make you a business owner. You’re most likely a property investor, which means travel and similar expenses are not tax deductible under the current tax rules. Always seek professional advice if you’re unsure, as individual circumstances can vary.
