Private ruling: Rental property deductions
Date of advice: 26 September 2018
Published: November 2018
Ruling period: Year ended 30 June 2018.
Date scheme commenced: 1 July 2017.

Ruling: Q1: Are you entitled to claim your share of the capital works deductions made to your rental property, due to storm damage in the 2018 income tax year? | A1: Yes. Your capital works deductions meet the requirements of Division 43 of the Income Tax Assessment Act 1997 . Further information can be found by searching ‘QC 21620’ on ato.gov.au

Relevant facts and circumstances: A short time ago you and your spouse (you) purchased a property (the Dwelling). As soon as the dwelling was purchased you made it available for rent. The Dwelling has been available for rent from the time it was purchased to the current date. A number of years later a storm battered the Dwelling causing extensive damage to its roof. The damage to the roof of the Dwelling led to the interior being affected by storm water. The Dwelling was available for rent when the storm damage occurred. The Dwelling is insured. You have not received any payments for loss of rental income or for any repairs made to the Dwelling from your insurance company. The tenants continued to pay rent throughout the period the Dwelling was damaged and repaired. You intend to claim the following amount as capital works deductions in your rental property schedule in your 2018 income tax return: ● The total of the capital works and building allowance expense for the 2018 income tax year is $XX, XXX.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 25-10 | Income Tax Assessment Act 1997 Division 40 | Income Tax Assessment Act 1997 Division 43