2024

Navigating potholes and sinkholes on “vacant” land

Published Date: 23 Dec 2024

 

This article discusses the combined impact of a series of changes to negative gearing and rental property deductions available to individual, family trust and self-managed superannuation fund taxpayers. Discussion regarding changes to vacant land, travel and capital allowance measures in relation to residential property now leaves us with a more complex income tax environment. Appropriate treatment of holding cost expenditure during construction, involuntary destruction and sale of residential investment property has been assisted with guidance from the ATO. Some exemptions and exclusions for assets used in business are also discussed, as are some associated income tax and CGT measures. Many individual residential rental property owners will need to consider these issues in order to ensure the appropriate income tax treatment. The new landscape is more complex and sometimes results in inconsistent outcomes. As a result, further reform is recommended.

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