New legislation has been introduced which will mean holding
costs can no longer be claimed by a taxpayer on vacant land unless
certain strict criteria are satisfied
The Income Tax Assessment Act 1997 (ITAA 1997)
currently enables tax payers to claim holding costs for vacant land
if the vacant land is held for the purpose of producing assessable
income or carrying on a business. Such costs have included council
rates, land taxes and interest on borrowings used to acquire the
land. However, this has long been a cause of debate as it can be
difficult to determine whether the vacant land is, in fact, being
held for income producing purposes.
Accordingly, amendments have now been introduced to alter the
ITAA 1997 which will result in certain tax payers not being able to
claim these deductions from 1 July 2019, regardless of when the
vacant land was originally purchased.
