INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision G - Limitation on deductions for interest on money borrowed to finance rental property investments  

SECTION 82KZD   LIMITATION ON DEDUCTIONS FOR RENTAL PROPERTY LOAN INTEREST  

82KZD(1A)   [Limitation not applicable from 1 July 1987]  

This section does not apply to the year of income commencing on 1 July 1987 or any later year of income.

82KZD(1)   [Rental property income not exceeding eligible rental property deductions]  

A deduction is not allowable to the taxpayer under section 51 in a year of income in respect of rental property loan interest incurred after the commencement date unless the rental property income derived by the taxpayer during the year of income exceeds the eligible rental property deductions of the taxpayer in relation to the year of income.

82KZD(2)   [Interest deduction limit]  

Where the rental property income derived by the taxpayer during a year of income exceeds the eligible rental property deductions of the taxpayer in relation to the year of income (which excess is in this subsection referred to as the interest deduction limit ):

(a) the amount, or the total of the amounts, of the deduction or deductions allowable to the taxpayer under section 51 in the year of income in respect of rental property loan interest incurred after the commencement date shall not exceed the interest deduction limit; and

(b) where the total of the amounts of 2 or more deductions that would be so allowable but for this subsection exceeds the interest deduction limit, those deductions shall be reduced respectively by amounts proportionate to those deductions and equal in total to the last-mentioned excess.