Untenanted IP is tax deductable?

[oh_noes]

I'll try to keep this question as simple as possible, so please let me know if I should provide more information.

My IP goes on the market on the 1st SEPT 2009.

If it takes 2 weeks to find a tenant at my proposed $320/pw, for negative gearing purposes, was my income $0 for those 2 weeks? Or do I have to use a 'baseline' or different dollar figure?

Fingers crossed that it's immediately tenanted.

Cheers

 

[Rob Williams]

I think you have answered your own question.
If it's available for rent from a point in time, then from that point in time, you are incurring expenses. If it's not tenanted, then you're not earning rental income, so your rental income is $0 until someone starts throwing some money into your account

 

[FletcherTax]

You only include the rental income you actually received during the financial year within your Return as you are reporting on a cash basis.

 

[Nathan]

start from day it goes on market availible for rent.

 

[Ol School Skata]

This is from the ATO's publication "Rental Properties 2009"

http://www.ato.gov.au/content/downloads/IND00191817n17290609.pdf


Interest on loans
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.

I believe the operative words here being you may be entitled to claim interest (and other operating costs) as a deduction as long as the property is "available for rental"

But as they say...seek advice from your tax adviser

OSS

 

[oh_noes]

Thank you

Do I need to get a housing evluation before I start to rent it?

I bought it end of 07 and lived in it since. Now it's on the market.

 

[Rixter]

Thank you

Do I need to get a housing evluation before I start to rent it?

I bought it end of 07 and lived in it since. Now it's on the market.

Yes get a sworn valuation.

 

[Tom Alaka]

Hi All

There is a case on point for someone who intended to build on their vacant IP land, but did not do so for some time due to a lack of time and funds. The ATO allowed deductions in the circumstances.

I dont have time to look for the link at the moment, though it is a pretty grey area, and agree that you should seek tax advice

cheers
Tom

 

[Pushka]

The interest paid is tax deductible from the time you take out the loan, even if the dwelling has not yet been built. It is about the intent - if you intend to rent it out when the dwelling is finished you start the deductions immediately. And as long as you keep that intent it is tax deductible.

The quote below is from page 14 of that link that ol School Skata gave - but maybe didnt keep reading for long enough.

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 use it to produce rent or other income – you cannot claim the interest after your intention changes.