Tax on residential rental property
It’s been a long time coming, but there has finally been some guidance released about the new tax rules on residential rental property. At this stage, they are still just proposals and are subject to change, but a couple of key points:
- If you purchased a residential rental property BEFORE the 27th of March 2021, the amount of interest you’re allowed to claim as a tax deduction will reduce progressively to zero over the next 4 years unless it is defined as a ‘new build’
- If you purchased a residential rental property ON OR AFTER the 27th of March 2021, from the 1st of October, you will be unable to claim any interest deduction unless it is defined as a ‘new build’
- The bright-line period for properties acquired on or after 27th of March 2021 moves to 10 years unless it is defined as a ‘new build’
- To be considered a ‘new build; it will be a self-contained residence that receives a CCC confirming the residence was added to the land on or after 27 March 2020
The devil will be in the details and as of yet, that hasn’t all been released. But if you do want to find out a little more about this, have a read of this