No Rental Income

Can you claim rental expenses (depreciation) if your property does not produce rental income?

 

Example: 

Joe & Mary have owned a property for a number of years in Sydney and decided to make it available for rent in January this year.  However despite repeated attempts and dropping their rental asking price, they have not been able to secure a tenant.  Therefore they have no rental income whatsoever.

 

Can they claim in their tax returns, expenses related to this property such as interest, depreciation and other?

 

Answer:

The answer is YES, Joe & Mary can still claim the rental expenses (including depreciation) on their property from the time they first advertised the property for rent.

 

If the ATO queries their claims, all Joe & Mary have to do is prove that repeated attempts were made to rent their property! They can do this by putting ATO in contact with the rental agent or showing them copies of the rental ads.