Costs prior to the purchase

[rocko]

If I buy an interstate property and I have a building inspection done first, and I fly to inspect it prior to purchase, can these be claimed sometime in my tax? Or do I simply discard these receipts as they all occurred prior to my being owner of the property? Thanks.

 

[matto_]

assume the costs would be either taken into account when selling (reduce CGT) or depreciated in same way as borrowing costs are.

 

[Aaron_C]

matto is right those costs would be added to your cost base, so you pay less CGT when you sell.

 

[Rob G.]

If I buy an interstate property and I have a building inspection done first, and I fly to inspect it prior to purchase, can these be claimed sometime in my tax? Or do I simply discard these receipts as they all occurred prior to my being owner of the property? Thanks.

To the extent travel was incurred in searching for a suitable property, they don't fall within the 2nd element incidental costs.

There is a possibility of using an agent as a 'spotter' (ATO ID 2003/361).

Building & pest inspection report, ID 2003/420 was withdrawn but is covered in the ATO Guide to Capital Gains.

Cheers,

Rob

 

[dan c]

matto is right those costs would be added to your cost base, so you pay less CGT when you sell.

No, they don't. Travel costs to look at property occur 'too soon' to be claimed, and don't form part of the cost base.

 

[coastymike]

RobG is correct once again.

They are capital costs but under s 110-25 do not form part of the cost base of the property.

Also look at withdrawn ID 2003/771 http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2003771/00001. Although it is withdrawn the ATO has taken the same view in audits.

 

[rocko]

Thanks all, for your help.