Private ruling: Rental deductions
Date of advice: 29 June 2023
Published: 21 August 2023
Ruling period: Year ended 30 June 2022
Date scheme commenced: 1 July 2021

Ruling: Q1: Can expenses such as mortgage interest, council rates, water rates, insurance, body corporate fees, repairs & maintenance form part of the cost base when calculating any capital gain or loss on the sale of your property situated in Australia? | A1: Yes. Based on the information provided to the Commissioner the expenses you incurred during the relevant period can form part of the cost base when calculating any capital gain or loss. As a non-resident of Australia for taxation purposes you are able to include expenses for the period your property was used as your main residence in Australia in the cost base when calculating any capital gain or loss. The expenses such as mortgage interest, council rates, water rates, insurance, body corporate fees, repairs & maintenance can form part of the third element of the cost base. These expenses are not an allowable deduction for the relevant period.

Relevant facts and circumstances: You are a non-resident of Australia for taxation purposes. You purchased a property in Australia several years ago. This property was your main residence until you moved out of it and commenced renting it. You moved overseas a few years later and became a non-resident of Australia for taxation purposes. You sold the property a couple of years later.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 subsection 110-25(4)