All Topics / Legal & Accounting / Interest on deposit payment – tax deductable?

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  • Profile photo of daniel_73daniel_73
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    @daniel_73
    Join Date: 2007
    Post Count: 15
    August 28, 2009 - 6:47 am

    Dear Friends,

    I am new to property investment. Here is a situation that I need some help with.

    My builder is requesting for a 5% deposit on the land (which will be settled early next year) and then the build will commence. The house will only be ready in 2010 Aug/Sep time.

    Question is, the interest on the 5% deposit on the land, is it tax deductable with my 2009/10 tax return?

    My understanding is that, it is NOT as I need to have tenants to claim any tax deductions. Am i right ?
    Appreciate any advice.

    Thanks

    Profile photo of Dan42Dan42
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    @dan42
    Join Date: 2008
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    August 28, 2009 - 7:00 am

    http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2001479/00001

    Generally, yes you can claim the interest. This ATO interpretive decision, based on Steele's case, says that a deduction can generally be claimed for interest (and other holding costs) in a period before it produces assessable income.

    Profile photo of KennyjaizKennyjaiz
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    @kennyjaiz
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    August 28, 2009 - 9:37 am

    nice one Dan42

    Profile photo of daniel_73daniel_73
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    @daniel_73
    Join Date: 2007
    Post Count: 15
    August 28, 2009 - 1:11 pm

    Thank you very much Dan42… Infact when asked my accountant he didnt know about this.

Viewing 4 posts - 1 through 4 (of 4 total)

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