Deductibility of ACT stamp duty and length of rental

[spectator]

Hi

We purchased a property in the ACT last year, initially as an investment but with the intention of moving in later on as our house is getting too small for 2 kids -not to mention when we have pesky long stay guests . I understand that in ACT stamp duty is deductible in the year it is incurred if it is for the purchase of rental properties. This is because ACT properties are actually on a lease and stamp duty is treated as lease documentation purposes.

We entered into a 12 month rental at the end of August. At the end of the lease we'd like to move in, and are about to advise our tenants of this. The real estate has asked whether we are willing to allow them to break the lease early if they would like to.

We are, but does anyone know if this will have any implications for the deductibility of stamp duty? I have been unable to find any reference to a minimum rental period to meet the requirement but don't want to get caught out as the deductibility is worth quite a bit of money.

thanks
Rob

 

[Keentobuy]

Yes - in the ACT can you can claim the full stamp duty amount in the financial year of the purchase.

For the purposes of your purchase, what happens after 30 June 2009 doesn't really matter. Get your tax return in and claim that stamp duty.

I'm not an accountant, so you should get some professional advice. However, we purchased our first home in much the same circumstances. Rented it initially and moved in later. Our accountant advised us that this was perfectly OK.

 

[spectator]

Thanks K2B

Looking forward to making the move

 

[Jonathon]

Yes - in the ACT can you can claim the full stamp duty amount in the financial year of the purchase.

I'm curious whether many people have been attracted to investing in Canberra purely for the stamp duty deduction?

Of course you should never do something just for the tax deduction, but a huge up front deduction, particularly if you're a higher rate tax payer, must be tempting to some?

 

[rugrat]

I'm curious whether many people have been attracted to investing in Canberra purely for the stamp duty deduction?

Of course you should never do something just for the tax deduction, but a huge up front deduction, particularly if you're a higher rate tax payer, must be tempting to some?

Just for the deductible stamp duty?? Be a pretty silly reason too in my books. After that first year you are still left with all the other expenses like land tax. And other states you may not have to pay stamp duty or can pay a reduce rate, same with land tax.

 

[dallee]

It is an attractive proposition for those wanting to upgrade their PPOR though. My accountant recommended 6 months as a minimum.