DH 8Deduction not allowed

1. A person is denied a deduction for interest if and to the extent to which the interest is—

2. incurred for disallowed residential property, but excluding interest for a grandparented transitional loan:
3. grandparented residential interest:
4. incurred to acquire an ownership interest in, or become a beneficiary of, an interposed residential property holder:
5. incurred to refinance a loan, interest for which is described in paragraph (a) or (c).

6. The amount of the deduction denied for grandparented residential interest is limited to the following percentages for the following periods:

   A small table of periods and applicable percentages of interest denied.

   Period that grandparented residential interest is incurred	Percentage denied
   1 October 2021 to 31 March 2022	25%
   1 April 2022 to 31 March 2023	25%
   1 April 2023 to 31 March 2024	50%
   1 April 2024 to 31 March 2025	75%
   On and after 1 April 2025	100%

7. The amount of the deduction denied for interest (the interest) incurred as the owner or to become an owner of an interposed residential property holder that is a close company is limited, for an income year, to the amount calculated quarterly using the following formula and summed for the entire income year:

   $interposed\; interest\; \times \; quarterly\; interposed\; residential\; property\; percentage.$

   Where:

8. In the formula in subsection (3)—

9. interposed interest is the interest, to the extent to which it is incurred in the relevant quarterly calculation period:
10. quarterly interposed residential property percentage is the interposed residential property percentage for the interposed residential property holder, calculated, as described in section DH 6, at the end of the relevant quarterly calculation period.