Private ruling: Stamp duty payable on the acquisition of a leasehold property
Published: July 2013
Ruling period: 1 July 2012 to 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for the stamp duty incurred in acquiring crown leases for properties you will use solely for the purpose of producing assessable income? | A1: Yes.

Relevant facts and circumstances: You acquired some rental properties. The properties are held under 99-year crown leases. You incurred stamp duty in acquiring the leasehold properties.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 25-20(1)

Reasons for decision: Summary: You can deduct expenditure you incur for preparing, registering or stamping a lease of property if you have used, or will use, the property solely for the purpose of producing assessable income (subsection 25-20(1) of the Income Tax Assessment Act 1997 ). The 99-year crown leases you hold on the two properties satisfy the general law requirement that a lease must be granted for a definite period. As you intend to use the properties solely for the purpose of producing assessable income, you are entitled to a deduction for the stamp duty you incurred to acquire the leasehold over the properties. The legislation does not provide that the deduction be amortised over either a set period of time or for the duration of the lease. It is implicit, therefore, that the expense is deductible in the year that it is incurred.