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Tax Deductability Question - Future Rental

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  • Tax Deductability Question - Future Rental


    I'm wondering if you could help with a question;

    I built a new home which was completed in August 2018, I'm now looking to build a bigger house to live in and rent out the home that was built in 2018.

    Do you know what Interest tax deductibility criteria I fit into here? Will I not be able to claim anything, or will it be part of the 4 year phase out? Or could it fall into something else once a 'new build' definition is properly defined?

    Clarification appreciated.


  • #2
    Hi Jeremy64,

    I was going to say 4-year phase-out - however, I believe it will be immediate as soon as your property becomes a rental with tenants.

    For capital gain taxes the bright line would be five years and you'd have to stump up the tax of the profit for the years it was rented if you sold the home within 5 years of its completion in 2018. Plus pay back the GST (though I don't know enough on tax and we have other PTers who do).

    The good news is your home would meet the healthy homes standards - being newish so at least you wouldn't have that expense before renting it out.



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