Private ruling: Deduction for transfer duty
Published: August 2017
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Question and answer | Is transfer duty for the transfer of a leasehold property deductible under section 25-20 of the Income Tax Assessment Act 1997 (ITAA 1997)? | Yes.

Relevant facts and circumstances: You have acquired leasehold property by means of a contract which settled in the 2017 income year. You are required to pay transfer duty for the transfer of the leasehold property. The lease is a rolling term lease. This property is used for income producing purposes.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 25-20

Reasons for decision: Summary: Section 25-20 of the ITAA 1997 allows a deduction for expenditure incurred in preparing, stamping, registering and assigning a lease of property which the taxpayer uses or will use for the purpose of producing assessable income. Section 25-20 of the ITAA 1997 specifically provides: (1) You can deduct expenditure you incur for preparing, registering or stamping: (a) a lease of property; or (b) an assignment or surrender of a lease of property; if you have used or will use the property solely for the purpose of producing assessable income. (2) If you have used, or will use, the leased property only partly for that purpose, you can deduct the expenditure to the extent that you have used, or will use, the leased property for that purpose. You are using the property wholly for income producing purposes. Therefore the transfer duty will be deductable under section 25-20 of the ITAA 1997.