Deductions for vacant land

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If you hold vacant land and intend to build a rental property, from the 2019-20 income year, you are unable to deduct expenses for holding onto the property until it is available to rent. This includes any vacant land where you have claimed expenses in previous financial years.

This does not apply to land:

  • held by the following entities

    • corporate tax entity

    • superannuation plan (other than self-managed superannuation funds)

    • managed investment trust

    • public unit trust

    • unit trust or partnership where all the members are entities on this list.

  • used in business or primary production

  • vacant land due to natural disaster or major fire.

If your land is vacant due to the rental property being destroyed by a natural disaster like a bushfire, you may be covered by the exceptional circumstances provision which may allow you to claim costs of holding the land for up to three years while you rebuild your rental property.

For more information or assistance please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au