Who can claim
This deduction is available to individuals and companies.
- For ordinary rental expenses, the property is rented or genuinely available for rent for the claimed period.
- Vacant-land holding costs are not denied where the land is used or available for use in a business carried on by you or a specified related entity.
- Vacant-land holding costs are not denied where the land is leased at arm's length to an entity that uses or holds it available for use in carrying on a business.
- The restriction does not apply to land held by a corporate tax entity, a superannuation plan other than a self-managed super fund, a managed investment trust, a public unit trust, or a unit trust or partnership whose members are all entities from that list.
- A statutory primary-production or qualifying exceptional-circumstances exception can apply when all of its conditions and time limits are met.
What you cannot claim
- A holiday home, private use or non-commercial rental arrangement can limit or deny deductions.
- Genuine availability for a future residential rental property does not by itself overcome section 26-102 while the land is vacant.
- Residential premises under construction or substantial renovation remain vacant until they can lawfully be occupied and are leased or available for lease.
- A fence, shed or other structure that is not substantial and permanent, or is incidental to a proposed structure, does not make the land non-vacant.
How the amount is worked out
Apply section 26-102 before claiming holding costs, then apportion each otherwise deductible expense to the qualifying use and period.
Records the ATO expects
- Rental listings and enquiries
- Tenant and property-use calendar
- Business-use or arm's-length lease evidence
- Corporate, super, trust, partnership or primary-production exception evidence
- Exceptional-event and restoration records where relevant
Before you rely on this rule
Genuine availability, private use and vacant-land rules materially change the result. Check the ATO rental-property guide before claiming.
Where this rule comes from
Primary source: ATO TR 2023/3 deductions for vacant land (TR 2023/3). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.