Private ruling: Rental property deductions
Date of advice: 17 May 2024
Published: 1 July 2024
Ruling period: Year ended 30 June 20YY | Year ending 30 June 20YY | Year ending 30 June 20YY | Year ending 30 June 20YY | Year ending 30 June 20YY | Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are you entitled to claim 100% of the loan interest on the property in your tax return? | A1: Yes. Based on the information provided to the Commissioner you are entitled to claim 100% of the loan interest in relation to your rental property under Section 8-1 of the Income Tax Assessment Act 1997 . You receive all the income in relation to the rental property and 100% of the loan interest therefore has the relevant connection to your income earning activities.

Relevant facts and circumstances: You purchased a rental property. You purchased the rental property a couple of years ago. Settlement for the rental property occurred several months later. The rental property is in your name. You took a loan out with the bank for the rental property at the time of purchase. The rental property is secured against your main residence which is jointly owned with your spouse. Your spouse was required to be on the loan due to the main residence being security but, you make all of the repayments for the loan. You receive all the income from the rental property and declare it all in your tax return. Your spouse does not receive any income from the rental property. You claim all allowable deductions for the rental property.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1