Rental Deductions for Vacant Property

Deductions may be available for an investment property even when it is not being tenanted provided that certain conditions are met.

Deductions will always be available when a property is considered to be “legitimately available for rent”.

Factors indicating a property is legitimately available for rent,even though it may be temporarily vacant,include:

  • Listing the property for rent with one or more real estate agents.
  • Placing advertisements in newspapers, holiday journals or on the internet.

It is recommended that taxpayers list their property through a real estate agent to ensure the conditions are met.

An exception to the above may be if a rental property is temporarily unavailable due to repair work being carried out.  Provided that the period of vacancy is not excessive, deductions will still be allowed for outgoings incurred while the repairs are completed.

Deduction or Not?

When in doubt concerning the validity of a purchase as a deduction, its best to record it, but bring it to the attention of your accountant, who can advise you as to what portion can be claimed as an expense, if it is to be viewed as a capital purchase to be depreciated, or whether it cannot be included. As you won’t always know which of these applies, it’s best to highlight all such potential issues with your accountant.

The team at Falcon Accounting study matters pertaining to tax law constantly and will give you the best advice on how you can treat all your different kinds of purchases for accounting purposes.