Vacant property

[Harriet]

Hello,

One of my IPs is vacant at present. This is not by choice; the market is quiet at that location at present. It's been vacant for about two months now.

This will result in a significant loss on that property this financial year.

I vaguely recall reading somewhere that you can only negatively-gear a loss on an asset that is producing income.

As this property is not currently producing income, doe this mean we can't negatively-gear the loss on it?

Or do I have this completely wrong?

Thanks.

 

[Ed Barton]

Hello,

One of my IPs is vacant at present. This is not by choice; the market is quiet at that location at present. It's been vacant for about two months now.

This will result in a significant loss on that property this financial year.

I vaguely recall reading somewhere that you can only negatively-gear a loss on an asset that is producing income.

As this property is not currently producing income, doe this mean we can't negatively-gear the loss on it?

Or do I have this completely wrong?

Thanks.

Not completely wrong. It has to be rented or availalbe for rent activey seeking a tenant. So long as you have proof you've been trying to rent it and are being reasonable price and who you will take you should be fine.

 

[Jamie M]

Not completely wrong. It has to be rented or availalbe for rent activey seeking a tenant. So long as you have proof you've been trying to rent it and are being reasonable price and who you will take you should be fine.

+1

My thoughts too.

Whilst I'm not an accountant - I can't see it being an issue. It's not like you're trying to do something dodgy - you're just struggling to get a tenant.

Cheers

Jamie

 

[Paul@PFI]

Provided its available for rent the deductions remain. This is common to holiday lets. High rent during Xmas but then long periods on uncertain vacancy.

The ATO may ask you to demonstrate how it was available for rent. Only in one instance can I recall them phoning the managing agent to confirm. (It was vacant but seeking a tenant so they were satisfied)

Have you spoken to other agents in local area ?

 

[marg4000]

Ensure that the rent being asked is not inflated. If the ATO do a desk audit, this is one if the things they check.
Marg

 

[Harriet]

Thanks.

We are safe.

It's advertised, for normal market rent.

Cheers.

 

[Nick Valsamis]

Just out of curiosity, is the property in a regional area?