It might surprise you that the answer to the above question is often – yes you can claim a deduction for a percentage of the purchase of a caravan or camper trailer as a tax deduction, as well as a percentage of running costs like repairs and maintenance.
Firstly, there needs to be an underlying business use. Some examples from our client base are:
A. A building industry client who often spend several days or a week at a project which is quite a distance from home, and so they use this type of accommodation to stay onsite.
B. An IT business who works in the pubs/clubs sector and does regular trips to clients up and down the coast, and stays in caravan parks rather than hotel/motel accommodation.
C. A manufacturing client who has 2 factories one in Sydney close to home, and one on the Central Coast and they use the caravan when doing multi day stints at the Central Coast factory.
Second consideration, in nearly all cases only a percentage of the caravan or camper trailer is really for business use, as pretty much all individuals or families who own them, use them for personal holidays as well. Therefore, the purchase must be apportioned, however even 10% or 20% (sometimes legitimately 50+%), of the purchase price being tax deductible is quite substantial. You also get the business % of the GST back if you purchase it from a retailer/business (no GST if purchased from a private individual).
Thirdly, keep in mind that whatever business % is claimed as a tax deduction, that same % will be taxable income when the van/trailer is sold (and will also be subject to GST).
Lastly, as the taxpayer it is your responsibility to prove the business use case and have evidence to back up your claim. If you would like any further advice on this subject, please feel free to contact us.
