Vacant Land Tax Deductions

In general, from 1 July 2019, expenses and outgoings associated with holding land which has no infrastructure and is not associated with a business activity are not deductible.

Precluded expenses include interest, rates and taxes and maintenance.

Certain entities, such as companies and managed investment trusts are excluded from these rules.

The Tax Office has issued taxation ruling TR 2023/3 which sets out their views in this regard including 15 examples of circumstances and outcomes.

The legislation implementing these measures received royal assent on 28 October 2019, and apply to costs incurred on or after 1 July 2019, even if the land was held before that date.

Further information:

• Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019
• TR 2023/3
• Deductions for vacant land | Australian Taxation Office