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No restrictions to negative gearing? Think again!

Published on 01 Aug 19 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

Significant changes to negative gearing are on the horizon for individual, family trust and self-managed superannuation fund taxpayers. Adverse tax consequences during construction phase involving involuntary destruction, significant damage and otherwise legitimately vacant rental properties are raised for consideration. The article discusses new concepts proposed to apply from 1 July 2019, including an unexpected and expanded meaning given to “vacant land” and “substantial permanent structure”. There are practical examples of how the proposed measures apply in the simple case of a residential property investor building on vacant land, and an individual or family trust taxpayer purchasing a basic house and land package for rental purposes. There is an exemption for assets used in business, and the not-so-transitional application dates are also looked at. This is an important legislative proposal that all advisers of residential property investors need to be aware of.

Author profile

David Krunic CTA
David is a Tax Supervisor with CPW Chartered Accountants in Melbourne. - Current at 01 September 2008
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