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MaryY(Initiate)Initiate
12 Mar 2024

If a client who has lived in his home for 5 years, moves out in April, and does some maintenance and continues to pay holding costs (Council Rates, Interest on Mortgage, etc) able to claim these costs if the first rent isn't received until July? He signs a management agreement with a Real Estate Agent in May and the tenant signs the lease on the 27 June, but rent is first received in July. The agent was showing prospective tenants in May and June. Is it deductible or is considered to be an "initial" repair?

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Taxduck(Taxicorn)Taxicorn
12 Mar 2024

Expenses cannot be claimed before a property is either rented or available for rent. See link. https://www.ato.gov.au/individuals-and-families/investments-and-assets/residential-rental-properties/rental-property-genuinely-available-for-rent

Repairs and maintenance while vacant and before available for rent are regarded as initial repairs and need to be capitalised under capital allowances or capital works, but can't be claimed until the property is available for rent. Holding costs should be recorded and kept for any possible CGT event.

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Most helpful reply

Taxduck(Taxicorn)Taxicorn
12 Mar 2024

Expenses cannot be claimed before a property is either rented or available for rent. See link. https://www.ato.gov.au/individuals-and-families/investments-and-assets/residential-rental-properties/rental-property-genuinely-available-for-rent

Repairs and maintenance while vacant and before available for rent are regarded as initial repairs and need to be capitalised under capital allowances or capital works, but can't be claimed until the property is available for rent. Holding costs should be recorded and kept for any possible CGT event.

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Are expenses incurred for a rental property deductible before rent is received? | ATO Community