Property redevelopment loan interest deductible

 

Income tax laws allow a deduction for expenses incurred in gaining or producing assessable income, provided those expenses are not capital, private or domestic in nature.

Interest expenses and associated holding costs were considered to be incurred in producing assessable income, even though the rental property it related to was being reconstructed. The recent private binding ruling highlights that, in terms of rental properties, interest during construction may not necessarily be a prelude to income earning activities.

Source: PBR 1051182180397