TAX DEDUCTIONS FOR VACANT LAND TO BE DENIED FROM 1 JULY 2019

The Government recently introduced legislation to deny certain tax deductions for vacant land.

The Government will deny certain deductions for expenses associated with holding vacant land.  They are trying to address concerns that deductions are being improperly claimed for expenses relating to holding vacant land where the land is not genuinely held for the purpose of earning assessable income. 

The vacant land must be available for rent for a creditable, commercial use. 

There must be a requirement, nexus between the expenditure and income for the property. Note, deductions denied will not be carried forward for use in later years.

Investment / rental property expenses are closely scrutinised. A clear typical example refers to travel expenditure to properties are denied.  Depreciation on existing chattels are denied.

 If you need further clarification on what is claimable with vacant land, please contact our office.