The AAT has partly affirmed the decision of the Commissioner to disallow additional deductions in relation to a rental property as the taxpayer was not able to substantiate some of the claims.
The taxpayer owned various rental properties in regional NSW, the present case concerned one of the properties which had been vacant for 5 years. For the 2007 income year, the taxpayer originally claimed rental expenses of $6,670 in relation to that property. Subsequently, she requested for the rental expenses to be increased by an additional $5,208.47 in relation to interest, telephone, electricity, insurance, repairs, inspection, and other costs. The Commissioner disallowed the additional deductions for the reason that the rental property was not available for rent in the 2007 financial year. The taxpayer argued that the property was available for rent and the vacancy was due to the remote location.
The Tribunal held that based on the evidence, it was satisfied that the property was available for rent in the 2007 financial year, “although efforts to find suitable tenants did not appear to have been vigorous, the location of the property is likely to have been a factor”. The Tribunal then considered the deductions claimed by the taxpayer and held that amounts in relation to advertising ($102.20), lawn mowing ($100), electricity ($100), and insurance ($245) be allowed as deductions. However, the AAT held the remaining deductions claimed by the taxpayer was unsubstantiated and therefore disallowed. Accordingly, the AAT partly affirmed the Commissioner’s decision to disallow additional rental deductions. (AAT Case [2012] AATA 174, AAT, Ref No: 2011/2025, Ettinger SM, 21 March 2012.)
[LTN 56, 22/3]