Private ruling: Deductions
Date of advice: 22 September 2025
Published: 10 November 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction for interest incurred on an investment loan prior to the property being genuinely available for rent? | A1: Yes. Based on the information provided to the Commissioner you can claim a deduction for the interest incurred on an investment loan for a property prior to it being rented. The Commissioner is satisfied it was your intention from the purchase of the property to rent it out and you carried out the repairs to make it habitable and to obtain a higher rent. The property is not being used for any private purposes. You can claim the interest on the loan as a deduction under Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) up until the property was available for rent. Now that the property is rented and has been available for rent you can claim all other allowable deductions under section 8-1 of the ITAA 1997.

Relevant facts and circumstances: You purchased the property as an investment property. Contracts for the property were exchanged and the property settled in a previous year. You obtained an investment loan and were required to have a rental assessment for this loan prior to it being approved. You received a rental appraisal for the property. The property was purchased with defects which are mostly capital in nature. There were numerous defects. The renovations were completed, and the property was available for rent through a Real Estate Agent. You rent the property for an amount per week. The property has not been used for private purposes.

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