Hi all, I have recently built an investment unit in Perth. The unit was completed in May 09 and first tenanted in June09.
I know I am able to claim interest on loan that was incurred for the whole finacial year, but what about other costs like in council rates and strata levies.
All the info i have found states that things like rates have to be pro rata against the time when the property was actually available for rent. I want to claim for the whole 12 months as like interest on the loan this was an expense incurred, and my intent was to always rent the property and derive income from it.
I claimed for the whole amount last year interest and rates etc under other deductions on E tax and it was accepted. Was I lucky not to get caught out last year?
Should be able to claim all costs i believe. Search on the ATO legal database for "steele" – a case on this area which lead to a TR by the ATO.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry, that is just what I was looking for.
http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2001479/00001
found this link here that explains my situation exactlyShame the guy at the ATO doesnt know the rules. He told me I could only claim on the interest nothing else.
Thanks again
Hi
That one is the ID dated from 2001. I think the ATO is not bound to follow decisions in a ID, but you can rely on a TR.
Here is the more recent TR 2004/4
http://law.ato.gov.au/atolaw/view.htm?locid=%27TXR/TR20044/NAT/ATO%27&PiT=99991231235958
Income tax: deductions for interest incurred prior to the commencement of, or following the cessation of, relevant income earning activitiesTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry, yes I read that ruling. I liked the 2001 info as it specifically mentioned other cost like the rates. It also mentioned that if you use it as guidance you may be challenged to repay but not be penalised. I think with the tax ruling and the other 01 info Im fairly safe.
The tax guy
i spoke to had agreed with claiming the interest but said there were no other expenses allowable prior to the property being available for rent. That is the part i had an issue with, as I want to claim rates, insurance etc for the whole financial year and not only 45 days worth.cheers
Grant
You must be logged in to reply to this topic. If you don't have an account, you can register here.
