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Vacant land exceptional circumstances

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Hi,

 

A fire destroyed a residential property that was at the time being rented, on 6/8/2016.  The property is also being renovated slightly so is considered vacant land.  There is a 3 year anniversary rule that says we can only claim holding costs as a deduction up to 3 years after the date of the incedent.  Does that mean we can claim costs up until 5/8/2019, or can we claim costs for the whole of the 2020 financial year?

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ATO Community Support

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Hi @Ricardo1,

 

Under the 'Three-year exceptional circumstances limit' on the ATO Deductions for vacant land page, it specifies "three years from the date of the exceptional circumstance". So going by your information above, you'd be able to claim costs up to 5/8/2019, assuming this is three years from the date of damage.

 

There is a possibility to request an extension to this, where failure to rebuild within the three year limit has been beyond your control, for example owing to:
• delays in council or local government approval
• your builder has ceased trading or gone into liquidation
• legal disputes.

 

However, as the three year anniversary has passed by several months, it can't be determined here on the forum whether that may be too late to be considered for an extension. The information to apply for a private ruling can be found here though in case you'd like to proceed with an extension request.

 

I hope this information is helpful, and all the best with the rest of the renovations.

 

RachATO

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @Ricardo1,

 

Under the 'Three-year exceptional circumstances limit' on the ATO Deductions for vacant land page, it specifies "three years from the date of the exceptional circumstance". So going by your information above, you'd be able to claim costs up to 5/8/2019, assuming this is three years from the date of damage.

 

There is a possibility to request an extension to this, where failure to rebuild within the three year limit has been beyond your control, for example owing to:
• delays in council or local government approval
• your builder has ceased trading or gone into liquidation
• legal disputes.

 

However, as the three year anniversary has passed by several months, it can't be determined here on the forum whether that may be too late to be considered for an extension. The information to apply for a private ruling can be found here though in case you'd like to proceed with an extension request.

 

I hope this information is helpful, and all the best with the rest of the renovations.

 

RachATO