Land as IP

[dwv]

Just wondering whether payments for land are tax deductible. For example, if I buy a block of land and pay around 1.5K a month on a P&I loan, and do that for 3 years without building a house, would 1.5K/mo be considered an investment and, thus, deducted from my taxable income?

 

[Petal]

No - it has to be income producing. Vacant land is not. There are many threads on this if you do a search.

Cheers
Petal

 

[skater]

Petal is right. If the land is non-income producing, then you can't deduct expenses. However you can change that if you think outside the square. Can you turn it into a paid car-park, or agist horses, or put up advertising? You can still earn income from vacant land.

 

[letiha]

It is deductible if your intention is to build an IP one it. However, the ATO would look at when you started claiming the interest, whether the 3 years was too soon.