Q.
When is the commencement date of renting or letting of real property? Is there a difference in commencement date for rental income treatment between s.4(a) business income or s.4(d) rental income?
A.
According to Public Ruling No. 4/2011 Date of Issue: 10 March 2011, the differences are below:
The difference is obviously the actual renting date for s4(d) where as the announcement date "ready for rent" for s.4(a). Hence, if an agent is engaged for letting the property, but only a month later the property is rented, the commencement date is a month later.
The renting for business income usually would be more professionally done. For example in advertisement "announcing" the readiness for rent, whereas for private individual renting, it is more spontaneous and done without advertisement. The correct term to describe "readiness" is "made available for letting".
There are two conditions specified in the Ruling, first is advertisement, second is engaging the agent. Hence, if both actions were taken, the earlier date is taken as the commencement date.
Ref:
INCOME FROM LETTING OF REAL PROPERTY
Public Ruling No. 4/2011 Date of Issue: 10 March 2011