Re: Loan interest on land purchased for investment deductable? -- Cox Business Accountants

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Date Posted: Friday, June 13, 11:57:04am
Author: Chankhana Chaleunthong
Subject: Re: Loan interest on land purchased for investment deductable?
In reply to: Paul Harris 's message, "Loan interest on land purchased for investment deductable?" on Friday, June 13, 09:11:23am

Hello Paul,

The loan interest and the stamp duty will be tax deductible if the land will developed for rental property purposes. It is deductible even though the property has not earned any income as long as you satisfy the following general conditions:

* The interest is not incurred too early before the property becomes an income producing property;
* The interest is not for private nature;
* the interest is incurred for the purpose of gaining or producing income;
* Finally, you are actively pursueing the development of the property for income producing purposes.

You should also obtain some written evidence to establish your intentions of developing the land for income producing purposes.

Please keep in mind that the above are just general conditions to help you establish your claims. Your situation may or may not satisfy all of these conditions, thus, I would recommend that you seek further advice from your accountant.

Regards,

Chankhana Chaleunthong

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