ATO Tax Ruling | Deductions for expenditure on environmental protection actions

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Did you know…?

You can claim a tax deduction for the cost of the testing and removal of asbestos from your rental or commercial property.

TAX RULING TR2019/D3: DEDUCTIONS FOR EXPENDITURE ON ENVIRONMENTAL PROTECTION ACTIONS* (FOR EXAMPLE – ASBESTOS)


If you have undertaken testing for asbestos (even if none was found), removed asbestos and/or reinstated property parts (for example, walls) that were removed due to asbestos, you may be able to claim a tax deduction on these costs.

This applies to rental or commercial properties, or your home if it is also a place of business.

Understanding what you can claim for*:

1. Asbestos testing / environmental testing of a building you own (even if asbestos is not ultimately found), providing the building is a rental or commercial property.

If asbestos is suspected in the building and testing is required, the testing activity is considered to be integral to the undertaking of the environmental protection activity, even if asbestos is not found. 

2. Asbestos removal by a licenced removalist. 

3. Reinstatement of a part of the property after asbestos is removed.

An example is the replacement costs of an asbestos-containing wall, to return the wall to its ‘former state’.

 

What about owner-occupiers?

An owner-occupier may benefit from this ruling* if they work from home, or rent out a portion of their property. The home must be also considered a place of business. However, the ruling does not explicitly refer to this and you are advised to seek the advice of your tax agent. Ordinary deductibility and apportionment principles will apply depending on your circumstances.

 

*Please note that this is general advice only. ASEA is unable to provide specific advice on individual cases as to whether they qualify to claim for a deduction. Please speak to a registered tax agent or the ATO for any further advice in this regard or to discuss your own personal circumstances.