Published on 02 Nov 18
by THE TAX INSTITUTE
From 1 July 2019, the proposed legislation will limit deductions for expenses associated with holding vacant land. The measure does not apply to expenses associated with holding vacant land that is used by the owner or a related entity to carry on a business.
Members are concerned that the Government has significantly underestimated the scale and scope of arrangements that are going to be affected under the proposed legislation. Further, in our opinion, the proposed legislation creates significant uncertainties. As the law is currently drafted, if land is not genuinely held for the purpose of generating assessable income, the costs are not deductible. In our opinion, the integrity issues should be addressed through better enforcement rather than making the tax system more complex by introducing further legislation.
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