Property Interest Limitation Rules

Residential rental property purchased on or after 27 March 2021, interest cannot be claimed as an expense from 1 October 2021, unless an exclusion or exemption applies.

• For property acquired before 27 March 2021, the ability to deduct interest on existing loans is being phased out over 4 years, ending 31 March 2025 (see the table below).

• Interest deductions for any new loans drawn down on or after 27 March 2021 is not allowed from 1 October 2021 onwards.

How interest deductions are being phased for properties acquired before 27 March 2021

Some properties are excluded from these rules and some exemptions apply.