Crikey, the old 'Deppro vs Depreciator' thread comes alive again.
TR 97/25 explains all, but the following may clear a few things up
The best way to tackle this is two look at two scenarios:
1. A person buys a building block and engages a builder to build a house on it for an agreed total sum. This contract price naturally includes the builder's profit margin, though of course it won't be disclosed. The home owner can claim what they have paid the builder, along with most other costs they incurred.
2. A spec builder owns a block of land and builds a house on it. He sells this to a buyer. In this case, the builders margin must be deducted from the construction cost.
The Judge,
If you've got all your costs, your accountant should know what to do with them. The ATO want the actual costs to be used, so sending someone to site would not be necessary. Your accountant should know what can and can't be included in 'the building', but as a broad guide, think of everything related to the building itself: architect/draftsperson, engineer, council approval etc.
Scott
TR 97/25 explains all, but the following may clear a few things up
The best way to tackle this is two look at two scenarios:
1. A person buys a building block and engages a builder to build a house on it for an agreed total sum. This contract price naturally includes the builder's profit margin, though of course it won't be disclosed. The home owner can claim what they have paid the builder, along with most other costs they incurred.
2. A spec builder owns a block of land and builds a house on it. He sells this to a buyer. In this case, the builders margin must be deducted from the construction cost.
The Judge,
If you've got all your costs, your accountant should know what to do with them. The ATO want the actual costs to be used, so sending someone to site would not be necessary. Your accountant should know what can and can't be included in 'the building', but as a broad guide, think of everything related to the building itself: architect/draftsperson, engineer, council approval etc.
Scott