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Edited version of private advice
Authorisation Number: 1052389720752
Date of advice: 24 June 2025
Ruling
Subject: Rental deductions
Question 1
Is the interest incurred deductible pursuant to section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer 1
Yes - the interest on the loan has the relevant nexus to the earning of assessable income to enable you to claim a deduction for the loan under section 8-1 of the ITAA 1997.
This private ruling applies for the following period:
Year ending X June 20XX.
Year ending X June 20XX.
Year ending X June 20XX.
Year ending X June 20XX.
The scheme commenced on:
X July 20XX
Relevant facts and circumstances
This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect and you cannot rely on it. Find out more about when you can rely on your private ruling at ato.gov.au/relyonprivateruling.
You purchased a block of land in February 20XX as part of a bulk land deal.
You signed a residential building contract ('the contract') in March 20XX with the building company.
The contract stipulated that the building works must reach the stage of practical completion no more than X weeks after the building period commences.
In August 20XX, you received correspondence of the building company's intention not to exercise the contractual rights contained in the contract as they had gone into administration.
You signed a contract with a second building company to complete the building works in December 20XX.
The block was divided into two blocks and a property was built on each.
The two properties were advertised for rent in May 20XX.
Tenants subsequently moved into the properties in or around August 20XX.
You received the 'Occupation Certificate' in September 20XX.
Throughout this process, you incurred interest on the loan totalling $XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
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