At which point in time does a PPOR convert to an IP for taxation purposes?

[THEHEATH]

Hi Guys,
Currently living in my PPOR (to state the obvious!) but expect to be moving away soon so this place will convert to an IP. I have a query regarding some repairs that need to be carried out. ie. The toilet needs replacing, shower screen is broken etc. nothing too major. I was wondering for tax purposes at what point do they classify a place as moving from PPOR to IP. The day you move out, the day you advertise it for rent etc? Basically I'm wanting to claim a deduction for the repairs and want to know how careful I have to be about when the work gets done.

Thanks guys.

 

[marg4000]

Repairs can only be claimed to bring a property back to the condition it was in when it was first rented. In your case, these repairs are due to your residence there, not tenants.

These will therefore be capital costs, not repairs and not deductible. Keep records though, you will be able to claim them if and when you sell when working out CGT.
Marg

 

[buzzlightyear]

The day the property is available for rent, is when you can start claiming costs against the rental income. This could be the day after you move out.

The works that you propose to do are capital in nature but they will be able to be depeciated though for the relevant period that the property is available for rent. Depending on what it is, will depend on the rate of depreciation.

 

[THEHEATH]

Goddarnitttt! Thanks guys

 

[THEHEATH]

The day the property is available for rent, is when you can start claiming costs against the rental income. This could be the day after you move out.

The works that you propose to do are capital in nature but they will be able to be depeciated though for the relevant period that the property is available for rent. Depending on what it is, will depend on the rate of depreciation.

^ Just on that, I thought that repairs were deductible? Surely the repair/replacement of a toilet and a broken shower screen aren't classified as capital improvements?

 

[Aimjoy]

^ Just on that, I thought that repairs were deductible? Surely the repair/replacement of a toilet and a broken shower screen aren't classified as capital improvements?

Hi THEHEATH,

See this recent post - it should answer your questions:

http://www.somersoft.com/forums/showthread.php?t=38718

Cheers & all the best with it.

Aimjoy

 

[THEHEATH]

Ok, thanks, once again you guys come up trumps. Legends

Guess I'll have to find someone who can post date things

 

[Aimjoy]

Guess I'll have to find someone who can post date things

I guess you are only kidding but if not I'd caution you against it. It is so easy to make money in this country that it is really unnecessary to do dodgy stuff like this.

All the best with your investing.

Aimjoy

 

[BayView]

As far as I know, the date you can claim anything in the way of expenses/repairs for an PPoR that's becoming an IP is from when you advertise it for rent.

The ads can be done while you are living there (we did this with our PPoR).

Thus, the repairs would be within that timeframe and should be deductible.

But you should check this with your accountant first.