Private ruling: Rental/deductions/other
Date of advice: 24 September 2025
Published: 24 November 2025
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Will the Commissioner allow you to deduct holding costs for vacant land beyond the third anniversary of the date that the residential structure containing your investment property was deemed to be uninhabitable as provided for in section 26-102(6)(d)(ii) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. The circumstances causing the residential premises to be uninhabitable are exceptional and outside of your control, allowing you to deduct the holding costs for the land as provided for in subparagraph 26-102(b)(i) of the ITAA 1997. The Commissioner will exercise their discretion allowing you an extension for a further 12 months (30 June 20XX) to deduct the holding costs for vacant land as provided for in subparagraph 26-102(6)(d)(ii) of the ITAA 1997.

Relevant facts and circumstances: You own an investment property at XX XXX XX. The property is a unit within a residential apartment complex. In MM 20YY, part of the roof on the complex was torn off during a storm. Due to the damage, the building was deemed unsafe for occupancy. All tenants were subsequently vacated and remedial works on the roof commenced. On DD MM 20YY, a fire destroyed multiple units within the complex, including the unit you own, and all units within the complex were deemed uninhabitable. At the time of the disaster, the apartment complex was insured under a strata insurance plan. A Storm and Fire claim was commenced by the unit owners in relation to the damage. Due to ongoing legal proceedings, no work to repair/rebuild the residential complex was undertaken until the matter was settled with the insurer. The duration of these proceedings was beyond the individual owner's control. You were unable to rent out your property until the restoration was completed. You have incurred holding costs associated with your ownership of the property while the property was uninhabitable. The complex remained closed and unfit for habitation until the works were completed. You received a certificate of occupancy in MM 20YY. You leased the unit on DD MM 20YY.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 26-102