On 1 January 2012, Peter borrowed $520,000 from a bank at a commercial interest rate of 8% per annum to purchase a "negatively geared" residential investment property in Australia. He is required to pay a weekly interest of $800. Immediately after acquiring the property, Peter engaged a real estate agent to advertise the property asking for a weekly rent of $400. Unfortunately, the real estate agent is unable to secure a tenant and the property is still vacant.
REQUIRED:
Discuss whether Peter would be entitled to any deductions in respect of the interest expenditure incurred from 1 January 2012 to 30 June 2012 for the 2011/2012 income year.