All Topics / Legal & Accounting / Subdivision – tax deductions

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  • Profile photo of NATS12NATS12
    Member
    @nats12
    Join Date: 2003
    Post Count: 129
    October 26, 2005 - 5:19 am

    This may belong in finance but it also fits in here for those in the know.

    I have an investment property which I will be sibdividing into 2. On the back I will be constructing another dwelling to rent out.

    Can I tax deduct the interest on the back lot while it is empty and under construction?

    Thanks.

    Profile photo of Samantha McGlynnSamantha McGlynn
    Member
    @samantha-mcglynn
    Join Date: 2005
    Post Count: 12
    October 26, 2005 - 5:24 am

    The advice I received for subdividing a block of land into 2 and building a house on one at the same time was a resounding NOOOO. If people know any different I would be most interested as i’d claim in this financial year.

    sam

    Profile photo of MIKALAMIKALA
    Member
    @mikala
    Join Date: 2005
    Post Count: 64
    October 26, 2005 - 1:21 pm

    Hi there,

    You most certainly can – the whole essence is whether the interest repayments are for a loan which is for the sole purpose of investing – it is the intention which is important.
    If you intend to build and rent you can claim the interest repayments on the loan for the block of land providing both properties on the subdivided blocks are rented (or going to be)
    I checked this with the Ato myself as I had a block of land I was going to build on and I claimed all the interest repayments last year.
    If you are still unsure ring the ato for confirmation on your situation but please make sure you talk to a IP specialist when you ring.

    Cheers

    MIKALA

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