EV 1052307172927currentnon-binding advice

Rental deductions

Non-binding edited private advice. This is an edited version of private advice the ATO gave to a specific taxpayer about their own circumstances. You cannot rely on it — it is not binding and provides no protection for anyone else (see PS LA 2008/4). Use it as a guide to the ATO’s thinking, not as authority.

1

Are you entitled to a deduction for the loan interest on the construction of a rental property prior to it being available for rent?

2

Yes. Based on the information provided to the Commissioner you can have a deduction for the interest on the loan used to construct the rental property. You have a loan to construct a rental property. The interest on the loan relating to the construction of the rental property is an allowable deduction under Section 8-1 of the Income Tax Assessment Act 1997 . Section 26-102 of the ITAA 1997 does not prevent you from claiming a deduction for the interest on the loan used to construct the rental property. This ruling applies for the following periods : Year ended 30 June 2024 Year ending 30 June 2025 Year ending 30 June 2026 The scheme commenced on: 1 July 2023

3

You purchased a block of land. You commenced building a residential rental property on the land in the year after it was purchased. The expected completion date of the property is a few years after construction commenced. You intend on renting the property out once completed.

4

Income Tax Assessment Act 1997 section 8-1 Income Tax Assessment Act 1997 section 26-102