are smaller items claimable ?

[mitta]

Always wondered how it worked with the taxman with smaller items.

Q. You are doing repairs on your new or old vacant IP and have purchased say a paint roller and a jimmy bar. These items are like tools of your trade, are you able to make a claim for them against this property even though you will continue to use them for the next. ? Mark

 

[The Y-man]

My guess is "yes".... although I would have doubts on the "new" IP.

Caution: I am not an expert

Cheers,

The Y-man

 

[AVD]

You could claim a portion of these items, if you werent comfortable claiming the lot because they would have some private nature. If they were purchased originally with the intent if using them specifically for the investment property repairs then I would claim some.

I would not think you would be able to for newly acquired property as they would probably be seen as more capital in nature because it was arguable that you had purchased the property for a price allowing for the condition it was currently in.

 

[mitta]

thanks guys, yes makes sense now especially with the comments on a newly acquired place. Mark

 

[pulse]

For expensive tools you clould claim depreciation and then apportion them for private vs business use. Just need to arrive at a reasonable useful life. For cheap tools hopefully and accountant will help us. Julie?

Cheers
Pulse

 

[Belu]

With regards to assets the tax stance as far as i know it is that capital costs are everything "to get the asset into a position and condition" to generate income.

So, if you had just bought the property and couldnt rent it in its current state then they would all be capital costs (to be depreciated).

Im not expert but thats my view

 

[mitta]

Thanks guys,

Just done some research, may be a little off topic of my orginal query thou.

Expenditure for repairs to recently acquired property is fully deductible ONLY if it involves the remedying of defects, damage or deterioration wholly attributable to the period in which the property is held, etc., by the taxpayer for income purposes.
As a general rule of thumb, but subject to the facts in each case, repairs effected soon after the purchase of property often rectify defects in, damage to, or deterioration present in the property at the time of purchase. TR 97/23 Hope that makes sense. Mark

 

[Bargain Hunter]

Mitta,

If you bought the property with damage and you repaired the damage in order to rent out the property the cost of the repairs goes against the cost base of the property.

If you had the property rented and damage was then caused to the property the cost of the repairs can be claimed that year.

Regards

Andrew

 

[mitta]

Mitta,

If you bought the property with damage and you repaired the damage in order to rent out the property the cost of the repairs goes against the cost base of the property.

Yes I totally agree with you Andrew, a little more from the ATO.

" A repair after acquisition of property is an " initial repair " if repair was due when the property was acquired, in the sense that there was a need for repair to restore or maintain the property's efficiency of function. In other words, the property was neither in good order when it was acquired nor suitable for use for income purposes in the way intended. The cost of effecting an initial repair is still not deductible even if some income happens to be earned after acquisition but before the repair expenditure is incurred. TR 97/23. " Mark