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BlakeATO(Community Support)Community Support
12 Apr 2021

Hi @AlaYain

You will claim the expense at the time you incur the expense. This means at the time you become liable for the stamp duty, that is the year you claim the deduction for that amount.

Stamp duty for leasehold makes up part of lease document expenses, which are a rental expense you claim now (not over several years). This means you must claim the expense wholly in the year it happens.

Remember that if the property is not rented, or not genuinely available for rent, when this expense happens it will instead go into the cost base.

You can read about this in rental expenses on our website.

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AlaYain(Enthusiast)Enthusiast
15 Apr 2021

Hi BlakeATO

Thank you for your response though my question was about purchasing a leasehold investment property in the ACT not about renting it. Property in the ACT is a leasehold not a freehold unlike other places in Australia. For that reason when one purchases a property in the ACT the stamp duty paid for the transaction is taxable in the year the transaction occurred. My question was can I instead spread out my tax claim across a few years?

RichATO(Community Support)Community Support
15 Apr 2021

Hi @AlaYain

When you purchase an investment property,either the freehold or a leasehold, you can only spread out the borrowing expenses over five years or the term of the loan, whichever is shorter.

The stamp duty charged by your state/territory government on either the freehold transfer or the leasehold interest in the property is not considered to be a borrowing expense. It's either a capital expense (purchase/freehold) or a lease document expense in your case.

So @BlakeATO is correct in advising you can't spread this cost our over multiple years. it has to be claimed in the same year the property is purchased.

We have a neat one-page PDF which summarises rental properties and borrowing expenses on our web site.

RichATO

AlaYain(Enthusiast)Enthusiast
15 Apr 2021

Thank you both @RichATO and @BlakeATO for your advises.

What the document says is "you may be able to claim this as a lease expense". what is the alternative if I don't.

stamp duty you incur when you acquire a leasehold interest in a property, such as an Australian Capital Territory99-year crown lease (you may be able to claim this as a lease document expense)

RichATO(Community Support)Community Support
15 Apr 2021

Hello @AlaYain

As @BlakeATO said in his reply:

'Remember that if the property is not rented, or not genuinely available for rent, when this expense happens it will instead go into the cost base.'

Well, the same thing applies if you don't claim this cost as a deduction in the year it occurs. It will form part of your cost base for a future capital gain calculation when the property leasehold is sold/transferred again in the future.

You can read more about what you can include in the cost base for real estate on our web page here. Have a close look at the example "Sale of a rental property". It should answer your question.

RichATO

_Derek647(Newbie)Newbie
18 Aug 2021

Hi RichATO and BlakeATO,

Thank you for your answers on this page.

I have a similar question:

What if I purchase a property in ACT for rental purpose at the beginning and I live in Sydney for work.

But after several months,due to my work changes, I need to move back ACT and decide not to rent this property out and change it to my main residence.

Can I still claim stamp duty in the financial year it occurs?

Thank you.

_Derek647(Newbie)Newbie
24 Aug 2021

Hi AriH,

Thank you for your answer.

My understanding is I cannot claim the full amount. Only the rental period by pro rata could be claimed as deduction?

If so, how would I determine how many percentage I could claim, just becuase I am living in the property as main residence and I don't know when will I sell this property.

Thank you.

Derek

_KaraBATO(Community Support)Community Support
27 Aug 2021

Hello @Derek647,

You are correct. As ACT properties are acquired under a 99-year crown lease, You can claim a deduction only to the extent that you use the property as a rental property.

You will need apportion your deduction. To help you do this please see heading Apportionment of rental expenses and Example 9 on our Rental expenses page.

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RE: stamp duty incurred to acquire a leasehold investment property in the ACT | ATO Community