I have a property which has been let out for the past several years.
Last year the property was vacant for six months and there were also several expenses incurred for repairs - plumbing, electrician, carpenter etc.
For the year as a whole the rental contributed an overall loss, i.e. the expenses were greater than the income.
I submitted a full income statement with my tax return and attached invoices showing all of the expenses, the return was flagged for audit and in the revised return they have reduced the levy expenses incurred on the rental eliminating the loss.
They also unexpectedly reduced my declared income by the same amount as the disallowed levy claims.
The net result of this is a 30% reduction in the rebate due to me.
Does this sound right?
How can the full levies paid for the year not be allowed as an expense claim?
I have a second question, as I am now selling the rental property.
If the property has been rented in previous years, but is vacant in the year in which it is sold can I still claim expenses (and therefore another loss) for the months in which it is vacant before the transfer of sale is completed?