Claiming Construction Loan Interest prior to house being rented

Hi. I'm new to investing and currently have my first investment property under construction. I was under the impression that if the house was under an investment loan then i could claim the interest paid on the loan each year. Then yesterday my uncle (who i an accountant) has told me you can only claim the interest once an income is being received from the property, not when vacant land or while under construction... Can someone please help me confirm this?
 
I was under the impression that if the house was under an investment loan then i could claim the interest paid on the loan each year.
It is nothing to do with the 'name' of the loan. It is your INTENTION to earn an income from it or otherwise that determines the interest deductibility

Then yesterday my uncle (who i an accountant) has told me you can only claim the interest once an income is being received from the property, not when vacant land or while under construction
Your uncle is incorrect if he believes this. This subject ( interest on vacant land etc) has been right to the High Court and "done to death" in Steele's case. Mrs. Steele won the day. The ATO web-site has it well documented.

Read this thread: http://www.somersoft.com/forums/showthread.php?t=38304
 
Deductibility

I think I agree that it is deductible but can't fiund the supporting piece yet. Basically its my understanding that as long as the intent is that it is always a rental property, as you have stated, and that you can show that this is the intent, then yes it is deductible. What your uncle is getting at is a long held view that there must be some income to offset the expense. I do however think the ATO has said that as long as the intent is there you should be right. Would recommend looking at it further and getting an absolute answer though.
 
Thanks Propertunity

Thanks propertunity. From one look tonight I can tell them are some switched on professionals in this forum..... and some others!!

Cheers Propertunity for the link.
 
Hi Matty,

We had a constuction loan, land and house package, the loan for the land went through end Oct last year and then the house was paid for in stages as it was being built. We were able to claim all interest and other costs even though we did not have tenants move in till July, this tax year. So go ahaed and don't worry you are able to claim.

good luck
 
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