Your area is taken to be used for a particular purpose or in a particular manner if:
- it is maintained ready for that use or that manner, is not used for another purpose or in any other manner and its use had not been abandoned, or
- its use for a particular purpose or in a particular manner has temporarily ceased because of construction of an extension, alteration or improvement or the making of repairs or seasonal or climatic factors.
Your area is not accepted as being used to produce assessable income:
- if it is a building (other than a hotel building or apartment building) used, or for use, wholly or mainly, for exhibition or display in connection with the sale of all or part of any building and construction began after 17 July 1985 but before 1 July 1997; if construction began after 30 June 1997, buildings that are used for display are eligible
- if it is a building, (other than a hotel building or apartment building), or an extension, alteration or improvement to such a building, where construction began after 19 July 1982 and before 18 July 1985, and it is used or available for use wholly or mainly for
- or in association with, residential accommodation, or
- exhibition or display in connection with the sale of all or part of any building, or the lease of all or part of any building for use wholly or mainly for, or in association with, residential accommodation
- to the extent the building (other than a hotel building or an apartment building) is for use mainly for, or in association with, residential accommodation, by the fund or an associate; see subsection 43-170(2) of the ITAA 1997 for exceptions to this rule.
Your area is taken to be used, or for use wholly or mainly for, or in association with, residential accommodation if it is:
- property (other than a hotel building or apartment building) and is part of an individual’s home, or
- a building (other than a hotel building or apartment building) where construction began after 19 July 1982 and before 18 July 1985 and that is used or for use, wholly or mainly for the purpose of operating a hotel, motel or guest house. Thus a hotel, motel or guest house, for which construction began during the specified time, and which does not qualify as a hotel building or apartment building (e.g. because it has fewer than 10 bedrooms or apartments) does not qualify for a deduction under Division 43.
Special rules for hotel and apartment buildings are contained in section 43-180 of the ITAA 1997.