Claim land tax as rental expense

https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/residential-rental-properties/rental-expenses/common-property-expenses#ato-Landtaxexpenses

(Taxicorn)Taxicorn

4 Aug 2025

"If you earn rental income from a property, you can claim a deduction for land tax. Include the deduction in the income year the liability relates to, not the year you pay it."

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Liked by segabandai and KevColl

(Devotee)Devotee

4 Aug 2025

Never rely on what AI may state as its no where near perfect and will not be for a long time.

You claim the land tax in the financial year that you pay for it because that is when you incur the expense. If your using accruals basis you claim the expense in the financial year you became liable for it which is when you received the invoice, which is still the same financial year.

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segabandai

(Initiate)Initiate

4 Aug 2025

Hi YEP,

Thank you very much for your prompt response.

I agree with you about AI. It is a useful tool in some aspects, but probably not in regard to provide professional advice. It is also tempting to use it when you have a question but do not know what to do.

I will keep payment records and use it for tax return in the next financial year.

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Liked by YEP

(Taxicorn)Taxicorn

4 Aug 2025

No? I don't think it works like that. You claim the land tax in the year it is liable for.

My conjecture would be if they want to check the land tax, all ATO gotta do is ask the state how much tax for a particular year and it will match up with your deduction for land tax. Or that if you had received the notice you would have paid it for that year?

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segabandai

(Initiate)Initiate

4 Aug 2025

Hi YellowPotato,

Thank you for your message, and I appreciate your opinions.

It does sound plausible to me, but it is also getting confusing now.

As ATO does not respond individual phone calls, I may need to contact my accountant this week.

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(Taxicorn)Taxicorn

4 Aug 2025

@segabandai

Maybe do more than contact and arrange a time to do an amendment.

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Most helpful reply

https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/residential-rental-properties/rental-expenses/common-property-expenses#ato-Landtaxexpenses

(Taxicorn)Taxicorn

4 Aug 2025

"If you earn rental income from a property, you can claim a deduction for land tax. Include the deduction in the income year the liability relates to, not the year you pay it."

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Liked by NikkiATO, Taxduck and 1 other

(Devotee)Devotee

4 Aug 2025

The land tax expense is specifically allowable under Section 25.75 of the ITAA, however I can't see in there where one can claim the expense in the year that it relates.

Maybe some else can clarify this for me ?? @YellowPotato @KevColl any ideas ??

ATO, maybe the ATO can assist with this one ??

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(Taxicorn)Taxicorn

4 Aug 2025

I think it's to do with case law/common law (whatever it's called) rather than legislation . CDS10301

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Liked by segabandai

(Devotee)Devotee

4 Aug 2025

interesting view point ... however specific legislation over-rides general and common law if I remember how its all suppose to work under the Acts Interpretation Act ...

I think its going to come down to the ATO interpretation of that specific legislation and if they have used some discretion.

I can't be bothered looking up the EM these days and the ATO have notified me that they are "reviewing" my question, which means they have sent it to their tech support for an answer. Will just have to wait and see.

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(Devotee)Devotee

4 Aug 2025

https://www.ato.gov.au/law/view/print?DocID=ato%2Fcds10301&PiT=99991231235958

I found the reasoning behind it all and in very brief terms - Its all in court decisions, ATO Ruling and ATO Case Decisions and thereafter ATO Interpretive Decisions.

ATO Case Decision CDS10301

https://www.ato.gov.au/law/view/print?DocID=EV%2F1012975597894&PiT=99991231235958

TR97/7

https://www.ato.gov.au/law/view/document?Docid=TXR/TR977/NAT/ATO/00001

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Liked by segabandai

(Devotee)Devotee

4 Aug 2025

@ATO I believe I found the answer .... have a look at my other post that refers to case law, ATO ruling and Case Decisions

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(Devotee)Devotee

4 Aug 2025

I did not see your reference CDS10301 until just now ... your absolutely right .. case law it is ....

when I can't even read things properly its time for me to take a break from this place

all the best, and thanks for interactions .. catch you around.

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segabandai

(Initiate)Initiate

5 Aug 2025

@YEP

Hi YEP and YellowPotato,

Thank you very much for your time and input.

I thought it may be a straightforward question before, and it looks like I am wrong.

It is more complicated than I expected, and I will go the wrong way if I did not ask the question here.

Thanks again for both of you, much appreciated.

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Liked by YEP