Relief Abolition

PHASED ABOLITION OF PROPERTY-BASED ‘LEGACY’ RELIEFS

This measure will restrict the various property-based tax relief schemes in the following manner:
Section 23-type Relief
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From 1 January 2011, this will be restricted to income from the Section 23 property itself (currently such income can be set against all rental income).

At end of 10 year holding period, any unused relief will be lost. If property is sold within this period, the new owner will not get Section 23 relief and the seller continues to be subject to a clawback of relief already given.

For Section 23 properties yet to be sold, for which the relief has yet to be claimed, the 10-year qualifying period will start on 30 June 2011 regardless of the date of the first qualifying lease. Therefore, in such cases no Section 23 relief will be available after 30 June 2021.

Residential owner-occupier relief is unaffected by these changes.