Rule 21 — Unrealised rent (s. 21(4))

Rule 21 says when rent receivable but not paid counts as rent the owner cannot realise for section 21(4): the tenancy must be bona fide, the tenant gone or being made to go, and the assessee must have taken reasonable steps to recover it.

The rule. For section 21(4), the rent the owner cannot realise equals the rent receivable by the assessee but not paid by a tenant, and so proved to be lost and irrecoverable, where all four conditions hold:

(a) the tenancy is bona fide;
(b) the defaulting tenant has vacated, or steps have been taken to compel the tenant to vacate;
(c) the defaulting tenant is not in occupation of any other property of the assessee; and
(d) the assessee has taken all reasonable steps to institute legal proceedings for recovery, or satisfies the Assessing Officer that legal proceedings would be futile.

In practice. Keep the tenancy agreement, evidence of the notice or steps taken to get the tenant out, and either the record of legal steps or a written explanation of why they would be futile, since limb (d) turns on what the assessee can show.

← All rules (333)Act 2025 hub