Private ruling: Deductions - vacant land holding costs
Date of advice: 7 December 2020
Published: March 2021
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to claim deductions for the holding costs incurred on the additional property constructed on the same title of land that has a permanent and substantial structure on it? | A1: Yes. Section 26-102 of the Income Tax Assessment Act 1997 does not prevent you claiming the holdings costs incurred on the additional property as it was constructed on the same title of land that has a substantial and permanent structure which is lawfully occupied.

Relevant facts and circumstances: A residential property was acquired on XX XXX 20XX. The property has been used for rental purposes since XX XXX 20XX. On XX XXX 20XX a development application was approved to build a new property at the rear of the land. The property will be an additional property on the land which already has an existing property that will continue to be tenanted. The two properties will be held under a single property title. Holding costs will be incurred in relation to the additional property.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 26-102