Taxes Consolidation Act 1997 section 372Q

Rented residential accommodation: deduction for certain expenditure on conversion

Section 372Q provides a deduction against rental income for expenditure incurred on converting a building into rented residential accommodation within a qualifying rural area.

• Applies to the conversion of a building (not previously used as a dwelling) into a house, or the conversion of a building into two or more houses, within a qualifying rural area.
• The converted house must have a floor area of between 38 and 175 square metres, hold a certificate of reasonable cost, and be first let under a qualifying lease of at least three months.
• The qualifying conversion expenditure is treated as a deduction under section 97(2) against the Case V rental income arising from the property.
• A clawback applies if, during the 10-year relevant period, the house ceases to be a qualifying premises or the lessor's interest is transferred.