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Edited version of your written advice
Authorisation Number: 1051510269590
Date of advice: 26 April 2019
Ruling
Subject: Income tax: rental property deductions
Question
Are you entitled to a deduction for rental property expenses where the property is damaged and unable to be rented?
Answer
Yes. The Commissioner is satisfied that but for the structural defects, the property would be available for rent.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You own an undivided half share of the property as tenants in common in equal shares.
You purchased the property as an investment property.
Construction finished on the property in 20xx.
The tenant moved into the property the following month.
The tenant experienced issues with the property.
The tenant vacated the property in 20xx citing the issues with the property as the reason for vacating.
On vacating, a detailed inspection of the property was undertaken where building defects were itemised. Recommendations were made for structural repairs.
You were advised not to rent the property until after the repairs were undertaken.
There is a dispute as to who is responsible for fixing the defects.
The repairs have not been completed.
Once the repairs are completed, you will rent the property.
You have incurred expenses for the property including:
● Council rates
● Water rates
● Loan interest
● Landlord insurance
● Body corporate levies
You have other deductions including
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8(1)
Income Tax Assessment Act 1997 division 40
Income Tax Assessment Act 1997 division 43