claim tax while constructing?

[getrich]

Hi,

Can I claim negative gearing for the period while property is under construction and not available for rent?

Thanks

amit jani

 

[twodogs]

It is possible. Search this forum for Steele's case.

 

[yo yo ma]

If you take out a loan to purchase a rental property, you can claim the interest charged on that loan, or a portion of the interest, as a deduction. However, the property must be rented, or available for rental, in the income year for which you claim a deduction. If you start to use the property for private purposes, you cannot claim any interest expenses you incur after you start using the property for private purposes.

Similarly, if you take out a loan to purchase land on which to build a rental property or to finance renovations to a property you intend to rent out, the interest on the loan will be deductible from the time you took the loan out. However, if your intention changes – for example, you decide to use the property for private purposes and you no longer intend to use it to produce rent or other income – you cannot claim the interest after your intention changes.

See p10 of the PDF and more importantly, speak to an accountant

http://www.ato.gov.au/content/downloads/IND00133187n17290608.pdf

 

[getrich]

Thanks Guys,

Its very clear to me now,

Appreciate your help

 

[Mry]

I prefer Ormiston's case here.

http://www.theage.com.au/news/anne-lampe/boat-claim-springs-a-leak/2005/11/07/1131212003660.html

It also found that he had borrowed the money to generate a higher rental and allowed his claims of about $70,000 in interest payments, rates and insurance on the property over four years.

It always helps to know what you can claim during the construction phase.