Got this situation:
You settle on an IP that is to be built starting, say 1st of July, 2002. 1 year later you get your certificate of occupancy, say 30th of June, 2003.
Now obviously you’re paying interest as the IP is being built. My question is this: Can you claim the interest you pay during the building stage of an IP during the 2002/2003 tax year? Or can you only claim the interest from the time you get your certificate of occupancy (ie from the time it is possible to actual rent)?
Any answers would be great.
The ATO ruling is that you can only claim interest from the time the property is available for rent. Any interest you pay while building is counted as part of capital ( purchase price ) and is taken into account when you sell. In other words it becomes part of your capital gains tax assessment so you can show a smaller gain.
Probably not the answer you wanted to hear but thats how it is.MJK
MJKMJK: Thanks mate – I had a feeling thats the way it is. Bummer. LoL.
Ah well, come selling time I guess I’ll be happy.
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