Any tax deductions available when buying OTP?

Hi all

just wondered if anyone knew what, if any, tax deductions I can make when buying off the plan ?

The situation is that I agree to purchase at $300,000, with settlement (and completion of property) in March 2010. I pay a 10% deposit up front and no staged payments.

I will obviously not be getting any rental income until it is finished, so, until that point, will be paying interest on the deposit.

Is there any tax deductions to be had ?

Should I consider a deposit bond instead of putting my own cash as deposit ?

Many thanks

Neil
 
Neil

If you get completion in March 2010, then you'll have it available to rent in this current tax year. All interest is deductible, as long as your clear intention is to own the property as an investment from the day it's complete.

Even if completion is delayed until the following tax year, you'll still get a tax deduction for the interest on the deposit (subject to the normal rules about having a clean loan for the deposit, etc) as you're borrowing to buy an incone-generating asset. The fact that it won't be available for rent until the follwoing tax year is irrelevant....as long as everything is at commercial rates, etc

Cheers
Jonathon
 
Thanks Jonathon

Neil

If you get completion in March 2010, then you'll have it available to rent in this current tax year.

Good point - forgot that !

Even if completion is delayed until the following tax year, you'll still get a tax deduction for the interest on the deposit

So are you saying that if it is delayed, I can still claim deductions on the interest in this tax year?

Cheers

Neil
 
Thanks Jonathon
So are you saying that if it is delayed, I can still claim deductions on the interest in this tax year?

There was a post somewhere in this forum from the ato that basically says as long as its going to be used an in investment, you can claim interest.

It doesnt have to be available for rent (ie advertised), just intended to be rented.
 
You can claim interest payments this year as long as when you purchase, and while you are claiming payments as a deduction, that it is for a rental property regardless of when settlement, and then tenancy occurs. Some very nice depreciation for new properties - make sure you get a good depreciation report done when it is complete.
 
Some very nice depreciation for new properties - make sure you get a good depreciation report done when it is complete.

Not to mention Stamp Duty concessions in NSW !

I will get on to Depreciator once completed (unless I can get one included as part of settlement :rolleyes:)

thanks for the reply.
 
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