ATO info for people with flood/cyclone damaged properties

[depreciator]

We're starting to field a lot of calls from clients with properties that were damaged recently.

Since we became Tax Agents last year (a requirement for all people doing Depreciation Schedules) I get lots of ATO broadcast emails.

This one is relevant to many people whose properties were damaged in the recent floods and cyclone.

http://www.ato.gov.au/individuals/content.asp?doc=/content/00275211.htm

It describes how to claim for work done to rectify damage. This would be relevant to some people on Somersoft.

Scott

 

[outbackjack]

Can you claim repairs on a Cyclone Damage property if you brought it that way and are going to rent it out afterwards???

I am looking at a property which needs a new roof, electrics and water damage all caused by a cyclone.


Cheers

 

[depreciator]

Nope.

Repairs relate to the cost of getting a property back to the condition it was in when you bought it.

If you buy a damaged property, any money you spend on fixing it are deemed 'improvement' i.e. claimed at 2.5% pa.

 

[DEC]

Also of interest is the flood levy

Everyone earning over $50k gets to pay, unless you got the free money from the government if your property was flood affected.

The Government considers that those most affected by the floods have already incurred financial costs and will not ask them to contribute to the recovery and reconstruction costs through this levy. Those people who receive an Australian Government Disaster Recovery Payment for a flood event in 2010-11 will be exempt from the levy.
http://www.alp.org.au/agenda/flood-recovery/flood-levy-facts/

LL's were not eligible for this free money so they have to pay the flood levy and pay for flood damage to their property.

Tenants did receive the free money and now also get the flood levy exemption.

Calculator here http://www.treasury.gov.au/floodrebuild/content/calculator.asp

I would imagine they will count your rental monies coming in as income, but will make no allowance for costs going out?

 

[outbackjack]

Thanks for the info 2.5% doesnt sound like much. I was hoping I could claim more.

Oh well, better than a kick in the pants I guess.