Depreciation/Deductions on 'Old' property.
- Thread starter NedKelly
- Start date
I belive you can only claim deductions on a property that is available to rent immediately, meaning all repayments before hand are at your cost.
My experiance is that most tenants won't report miror faults until they become major ones, and builders don't like fixing major problems for free when they could have fixed them for nothing earlier.
Gardens establish themselves whithin a short time but initially someone needs to hold a hose.
There a world of information on this website, just search for it
My experiance is that most tenants won't report miror faults until they become major ones, and builders don't like fixing major problems for free when they could have fixed them for nothing earlier.
Gardens establish themselves whithin a short time but initially someone needs to hold a hose.
There a world of information on this website, just search for it
emu said:There a world of information on this website, just search for it
Well I did do a search as I seem to remember reading a post titled "New vs. Old" so I put "New Old" in the site search engine and it came back with it doesn't do searches on three letter words or something like that. WTF
No actually. As long as the intention is to rent out.emu said:
http://www.somersoft.com/forums/showthread.php?t=8528
emu said:I belive you can only claim deductions on a property that is available to rent immediately, meaning all repayments before hand are at your cost.
for it
Hi,
this requirement above is mainly meant to stop
landlords from claiming property expenses in periods when the property may be used for private purposes.
However when you purchase land and build for the purposes of renting the property for income producing purposes then requirement are different From the ATO
publication 'Rental Properties' page 14
(NAT1729-05.pdf)
"
If you take out a loan to purchase a rental property, you
can claim the interest charged on that loan, or a portion
of the interest, as a deduction. However, the property
must be rented, or available for rental, in the income year
for which you claim a deduction. If you start to use the
property for private purposes, you cannot claim any interest
expenses you incur after you start using the property for
private purposes.
Similarly, if you take out a loan to purchase land on which
to build a rental property or to finance renovations to a
property you intend to rent out, the interest on the loan
will be deductible from the time you took the loan out.
However, if your intention changes – for example, you
decide to use the property for private purposes and you no
longer intend to use it to produce rent or other income –
you cannot claim the interest after your intention changes. "
On further enquires to the tax office I was given advice that other expenses incurred in the building period are also claimable deductions. This is the basis of some of my deduction claims to which my tax accountant agreed was correct.
Cheers
can claim the interest charged on that loan, or a portion
of the interest, as a deduction. However, the property
must be rented, or available for rental, in the income year
for which you claim a deduction. If you start to use the
property for private purposes, you cannot claim any interest
expenses you incur after you start using the property for
private purposes.
Similarly, if you take out a loan to purchase land on which
to build a rental property or to finance renovations to a
property you intend to rent out, the interest on the loan
will be deductible from the time you took the loan out.
However, if your intention changes – for example, you
decide to use the property for private purposes and you no
longer intend to use it to produce rent or other income –
you cannot claim the interest after your intention changes. "
On further enquires to the tax office I was given advice that other expenses incurred in the building period are also claimable deductions. This is the basis of some of my deduction claims to which my tax accountant agreed was correct.
Cheers
Nearly new - nearly the same.....
Alot of investors have been told that only new properties offer the tax advantage of depreciation and capital allowance deductions.
This is incorrect. A "Nearly New" - i'm assuming a year old or so - can yield just as much in most cases as brand new.
So focus on the value you are paying first, in your particular case the difference in depreciation will be negligible.
This is based on the assumption your "nearly new" property is less than say 3 years old.
I have a friend who wont call his car second hand or old until it has reach 200km!! I guess new is a relative term!
Regards
NedKelly said:
Alot of investors have been told that only new properties offer the tax advantage of depreciation and capital allowance deductions.
This is incorrect. A "Nearly New" - i'm assuming a year old or so - can yield just as much in most cases as brand new.
So focus on the value you are paying first, in your particular case the difference in depreciation will be negligible.
This is based on the assumption your "nearly new" property is less than say 3 years old.
I have a friend who wont call his car second hand or old until it has reach 200km!! I guess new is a relative term!
Regards
Another advantage of buying a near new property (especially a unit) is that it often takes a year or so to sort out the bugs in a building.
I went with a friend to look at an apartment last year that had been finished 12 months previously. They were still having elevator issues.
Water penetration can be a big problem in new developments, too. Often it takes a huge downpour to make these flaws apparent. And anybody in Sydney in particular knows that huge downpours don't happen all that often these days. (If there is a property you are interested in and there happens to be a storm, I reckon it's always a good idea to go around the new day and see how the building stood up to it.)
Scott
I went with a friend to look at an apartment last year that had been finished 12 months previously. They were still having elevator issues.
Water penetration can be a big problem in new developments, too. Often it takes a huge downpour to make these flaws apparent. And anybody in Sydney in particular knows that huge downpours don't happen all that often these days. (If there is a property you are interested in and there happens to be a storm, I reckon it's always a good idea to go around the new day and see how the building stood up to it.)
Scott
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Sure, but I would still like as many problems as possible to be sorted out BEFORE I get the keys to a property, rather than having to chase people and lodge insurance claims etc.
That's why I think a pre settlement inspection is important. Before settlement, buyers are in a much better negotiating position, especially in this market.
Scott
That's why I think a pre settlement inspection is important. Before settlement, buyers are in a much better negotiating position, especially in this market.
Scott
