A client is considering buying a block of land so she can build an investment property on it. She’s asked if she has to wait until she’s getting rent from the house before she can claim tax deductions on the loan.

This client can plan on claiming deductions against both the purchase loan and the construction load from the time of purchase of the block if:

1. she is purchasing the block of land and constructing a house so she can generate income
2. if she intends to generate income as soon as the property is available for rent
3. if the house is built in a reasonable time frame.