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Re: Vacant Rental Property - Bank Interest Claim/Deduction

Initiate

Views 1861

Replies 8

Hi everyone,

 

My property is vacant at the moment, as my recent tenant just left.  It's being put up for lease (no agent, as we are trying to lease it ourselves) but the market is slow so not yet successful. In this situation, if the property can't be leased out and is left vacant (perhaps for an extended period time if can't be leased out), can bank interest still be deducted or claimed (negative gearing)? I asked my accountant and she said you can only claim bank interest if the property is leased out; however I also heard this is not the case? I even called ATO and it seems to be a grey area and they couldn't find the exact ruling for this. Hopefully someone in this forum can help me with this query. Greatly appreciated! 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Taxicorn

Replies 7

@sponge 

 

You can claim Rental expenses during the period that the property is availabale for rent and is actively advertised.

 

https://www.ato.gov.au/uploadedFiles/Content/IND/Downloads/TaxTimeToolkit_Rental.pdf

 

Item 2

Make sure your property is genuinely available for rent

Your property must be genuinely available for rent to claim a tax deduction.

This means:

You must be able to show a clear intention to rent the property advertising the property so that someone is likely to rent it and set the rent in line with similar properties in the area avoiding unreasonable rental conditions

8 REPLIES 8

Most helpful response

Taxicorn

Replies 7

@sponge 

 

You can claim Rental expenses during the period that the property is availabale for rent and is actively advertised.

 

https://www.ato.gov.au/uploadedFiles/Content/IND/Downloads/TaxTimeToolkit_Rental.pdf

 

Item 2

Make sure your property is genuinely available for rent

Your property must be genuinely available for rent to claim a tax deduction.

This means:

You must be able to show a clear intention to rent the property advertising the property so that someone is likely to rent it and set the rent in line with similar properties in the area avoiding unreasonable rental conditions

Initiate

Replies 3

Thank you so much for the information! This clarifies my uncertainty. Greatly appreciated. Smiley Happy

Taxicorn

Replies 2

@sponge 

 

You need to consider another accountant..Smiley Happy

Initiate

Replies 1

Yes, absolutely! But there are so many incompetent accountants out there. Any recommendation of good accountants?

Taxicorn

Replies 0

@sponge 

 

Like in most careers there are ok ones, good ones, very good ones, excellant ones and ones that excel..

 

Hard to recommend as I am not allowed to...and am probably in a different state Smiley Very Happy

Initiate

Replies 2

Hi,

 

Just what to clarify below item 2. Does it count if the property is listed under a "free cost" rental webpage? or is an invoice required to consider "genuinely available for rent"? 

 

Item 2

Make sure your property is genuinely available for rent

Your property must be genuinely available for rent to claim a tax deduction.

This means:

You must be able to show a clear intention to rent the property advertising the property so that someone is likely to rent it and set the rent in line with similar properties in the area avoiding unreasonable rental conditions

 

Taxicorn

Replies 1

@sponge 

 

You don't have to pay for the advertising, but being available for rent and being seen by the general public should be enough.

Just make sure that it is not just being seen by a couple of people etc.

 

Devotee Registered Tax Practitioner

Replies 0

@sponge @macfanboy 

 

My understanding is that "genuinely available for rent" is a long standing ATO practice.

The facts are case by case and I would have strong supporting evidence.

 

Duncan