We recently bought a block of land near Sydney, on which are going to build a project home once the DA is in place.
We will obviously be paying a lot of interest on the loan from now until when the house is completed. I understand that it is possible to tax deduct the interest on the loan if the house is considered to be an IP. This is sufficiently attractive for me to consider letting the house for a short while rather than occupying it ourselves.
The ATO website is not particularly clear in this area, so I would really appreciate some guidance with these questions:
1. how long we would need to let the house for after construction for it to be considered an IP?
2. can we claim deductions for interest during the whole DA approval and build periods?
3. do I simply claim the deduction from my 2009/2010 income through my e-Tax return next year, or is it spread over 5 yrs? I presume there is no way of claiming the money any earlier?
4. does any of this effect my rights to claim the first time buyers benefits? (this is the first house we have owned in Australia)
Dave
We will obviously be paying a lot of interest on the loan from now until when the house is completed. I understand that it is possible to tax deduct the interest on the loan if the house is considered to be an IP. This is sufficiently attractive for me to consider letting the house for a short while rather than occupying it ourselves.
The ATO website is not particularly clear in this area, so I would really appreciate some guidance with these questions:
1. how long we would need to let the house for after construction for it to be considered an IP?
2. can we claim deductions for interest during the whole DA approval and build periods?
3. do I simply claim the deduction from my 2009/2010 income through my e-Tax return next year, or is it spread over 5 yrs? I presume there is no way of claiming the money any earlier?
4. does any of this effect my rights to claim the first time buyers benefits? (this is the first house we have owned in Australia)
Dave