The New ‘Vacant Land’ Rule (3) – ‘In Use or Available for Use’

In the world of tax regulations, determining when a structure is deemed 'in use or available for use' can be a bit tricky. Let's break it down in simpler terms, especially considering recent updates in SEO Google algorithms.

When a Structure Is Considered 'In Use or Available for Use'

For starters, figuring out when a structure meets the criteria of being 'in use or available for use,' as outlined in S.26-102, isn't always crystal clear from official documents like the Explanatory Memorandum (EM) or current ATO materials.

However, the ATO suggests that this concept is broad. It goes beyond just being rented out or ready for rent. Basically, if a building or significant permanent structure is ready for use or occupation, it usually falls under the category of 'in use or available for use' according to S.26-102(1).

When Land Must Have a Structure

Now, for entities affected by recent changes, if you want to claim a deduction for holding costs on 'vacant land,' there's a condition. The land must have a substantial and permanent structure that's 'in use or available for use' at the time you incur the expense. This means the land can't be considered 'vacant' when you spend money on it.

Even if you stop owning the land later, any deductible loss or expense you incurred before you let it go will likely remain deductible. This is specified in S.26-102(1)(b)(ii).

Special Rule for 'New' Residential Premises

There's a twist when it comes to 'new' residential premises, as outlined in S.26-102(4). If your land has residential premises that were built or significantly renovated while you owned it, they don't count as eligible substantial and permanent structures. Weird, right? So, despite having residential buildings on the land, it's still considered 'vacant land' for the purposes of S.26-102.

To make matters deductible, the premises must:

1. Be legally fit for occupation (like having an occupancy certificate for newly built or renovated residential premises).
2. Be genuinely available for rent (meaning they're leased, hired, or available for lease, hire, or license).

Defining 'Residential Premises'

Now, what exactly counts as 'residential premises'? According to S.195-1 of the GST Act, premises are generally considered 'residential' if they offer shelter and basic living facilities, are suitable for humans to live in, and either:

1. Are currently occupied as a residence or for residential purposes.
2. Are meant to be occupied and can be occupied as a residence or for residential purposes.

Anything that lacks these basic living features doesn't count as 'residential premises.'

• The New 'Vacant Land' Rule (1)
• The New ‘Vacant Land’ Rule (2) – ‘Substantial and Permanent Structure’
• The ‘Vacant Land’ Exclusions (1) – The ‘Carrying on A Business’ Exception (1)
• The ‘Vacant Land’ Exclusions (2) – The ‘Carrying on (any) Business’ Exception (2)
• The ‘Vacant Land’ Exclusions (3) – ‘Primary Producer’ and ‘Exceptional Circumstances’ Exceptions