building inspection costs prior to settlement

[redsquash]

Are building inspection costs prior to settlement added to the capital cost when determining total cost of an investment property?

If these costs were borrowed funds would these interest costs be added to the total capital cost.
Are all costs prior to settlement regarded as capital costs?

 

[Mry]

Building inspection costs are capital costs. They are not a condition of financing so they would not be considered to be a borrowing cost.

Not all pre-settlement costs are considered capital costs. It depends on the nature of the cost.

 

[firstmillion]

Building inspection costs are capital costs. They are not a condition of financing so they would not be considered to be a borrowing cost.

Not all pre-settlement costs are considered capital costs. It depends on the nature of the cost.

Hi,

Is this cost tax deductible ?

Consider a scenario : If i get a building and pest inspection done for an investment property and then don't buy the property. Can I claim the tax benefits in the next IP which I have bought ?

Cheers

 

[Mry]

The cost is not tax deductible against your income. Rather, it is added to the cost of the property so that when the property is sold, the costs reduces the taxable profit.

ATO ID 2001/477

You cannot 'roll' costs from one canceled purchase into another. The costs for inspecting properties that you do purchase are lost (unless you run a business of buying rental properties. Use the search feature here for more info on that).

 

[firstmillion]

Thanks

The cost is not tax deductible against your income. Rather, it is added to the cost of the property so that when the property is sold, the costs reduces the taxable profit.

ATO ID 2001/477

You cannot 'roll' costs from one canceled purchase into another. The costs for inspecting properties that you do purchase are lost (unless you run a business of buying rental properties. Use the search feature here for more info on that).

Thanks Mry.