All Topics / Help Needed! / Tax deductions while building an investment property?

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  • Profile photo of FilmScoreFilmScore
    Member
    @filmscore
    Join Date: 2010
    Post Count: 1

    Evening All,

    I purchased some land late April 2010 to construction my 3rd investment property.  I'm a little confused as to weather I can claim the interest and borrowing expenses against my income on the loan that I took out to purchase the land and progress construction payments.  The ATO released a handy document 'Rental Properties 2010' however it's not clear so I'm hoping someone can advise. 

    '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.'

    It goes on….

    '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.'

    The first paragraph says that the property must be rented, or available to rent, in the income year for which you claim a deduction.  You cannot rent a property under construction, so at first I thought I wouldn't be able to claim these expenses.

    The second paragraph indicates that I can….

    I tried submitting my etax return while claiming the interest and a porting of borrowing expanses, however I received the following warning 'Mandatory field missing – Date property first became available to rent'.  As the property is not rented I cannot put a date in this field.  Assuming that I can claim these expenses do you know how I get around this?

    Thanks in anticipation

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Put in a paper application? Or put down the date you acquired the land maybe

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 2 posts - 1 through 2 (of 2 total)

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