Contract Settles in New Financial Year and Tax Deductibility

Hi Guys,

We recently settled on an investment property. The contract was signed in the previous financial year (2012/2013). Are any of the costs incurred in the previous financial towards attaining the investment property tax deductible for the previous financial year?

What about costs such as self education regarding property investing and research tools, are they deductible for last financial year as the contract was signed and entered then, but property settled this financial year?


Self education costs for prop investing? That cost is too early to be a deductible cost. Researching and finding a prop is a capital expense and NOT deductible OR eligible as a CGT cost as its prepatory to the actual investment. Ditto "software", publications etc.

Similar problem occurs with initial repairs. Wish I had $$$ for clients who have insisted a cost is a repair when they buy. They spend a fortune fixing the deck which needs repair but they bought it in that condition and have to accept the cost to make it good is a capital cost reflecting a lower cost to buy for that defect.

Travel to find or even buy IP is also not eleigible for deduction or capital gains. Too early. Once you own it then annual inspections, repairs etc is OK ONCE IT IS LEASED.

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Thanks Paul,

So all costs are capital costs until it is leased? What about the cost of obtaining insurance on the property when the contract is signed? Will that be deductible in the year paid or will it be CG?