The new law on ring-fencing rental losses is now in force, which means:
- In most cases ring-fenced deductions will be carried forward and can only be used against residential rental or sale of property income in future years.
- Property investors will, in most cases, no longer be able to reduce their tax liability by offsetting residential rental property deductions against their other income, such as salary or wages, or business income.
The new rules apply from the start of the 2019-2020 income year and apply to:
- Mainly rental properties but can also include other residential land.
- Individuals, partnerships, trusts, look-through companies and close companies.
Own a rental property? We’re happy to talk you through your tax implications so you don’t get caught out.