Depreciation on PPOR turned IP

[Fryboy]

Hi all,

I have purchased my PPOR (Oct 10) in which i will be turning into an investment property before June 30 this year.

The borrowing and associated costs such as stamp duty, mortgage insurance and other fees have been paid and were not capatilised to the loan account. I would like to know if these items are still deductable for the ENTIRE year (i.e. Oct 10 to EOFY) or only PART of the year from when i tyurn the PPOR into an IP.

Or maybe they arnt deductable at all?

Any help would be appreciated.

Thanks!

Brad

 

[syba]

Only mortgage insurance is deductable - over 3 years. Like everything else, you need to apportion it for the period of time it relates to an IP rather than a PPOR. Essentially you won't be able to deduct 1/6th of it as it was a PPOR for 6 months (6 out of 36 months).

The balance of the items get added to your cost base when working out any capital gains tax if/when you sell the property. Again, the CGT may need to be apportioned for the period of time it was your PPOR/IP.