Getting a new IP ready

[littlemaze]

I've just settled on a new IP on Friday - yeah!

I have just spent the weekend doing minor jobs around the house - painting inside cupboards and general touch ups, installing a flue, changing power points, spraying weeds. All individual items purchased were under $300 and the house is on the rental market.

Are any of these costs tax deductible? Can I view these as capital acquisitions that are under $300 and therefore tax deductible in the year of acquisition?

Thanks in advance.

 

[Aceyducey]

Littlemaze,

Did you just purchase materials for maintenance on the property or did you also purchase new fixtures (curtains & the like)?

Fixtures are capital purchases and therefore depreciable against tax (over a period of years, not all in the first year).

I don't think you can claim paint, weed spray or power points as capital expenses/fixtures for a property.

Cheers,

Aceyducey

 

[littlemaze]

Originally posted by Aceyducey
Littlemaze,

Did you just purchase materials for maintenance on the property or did you also purchase new fixtures (curtains & the like)?

Fixtures are capital purchases and therefore depreciable against tax (over a period of years, not all in the first year).

I don't think you can claim paint, weed spray or power points as capital expenses/fixtures for a property.

Cheers,

Aceyducey

Hi Aceyducey,

Most things that I bought were small things - tin of paint, 3 new power points, light switch, weed spray etc.

I did buy some more substantial things - a flue for the kitchen fan and garden hose and sprinkler.

The reason I thought the power points would be tax deductible is that electrical distribution systems appear on QS reports.

Does that help?

 

[Aceyducey]

Littlemaze,

I'm no expert, but by detailing the items an expert can now comment on it

IMHO the hose & sprinkler are fixtures, flue probably is.

Other things probably fall under maintenance & are not claimable as a capital expenses.

The ATO has information *somewhere* on their site about what are allowable for IPs - I'll try to find it.

See if you can locate DaleGG to give an authorative comment.

Cheers,

Aceyducey

 

[ruk]

I may be wrong but i think you can claim them as repairs and not capital improvements.

 

[DaleGG]

Hi

Repairs and improvements to an IP just bought are not tax deductible at all. You can, in most cases, add these costs to the cost base of the property for CGT purposes though.

The tax office argument is that you have not repaired anything. All that you have done is improved the property from the condition in which you bought it.

Sorry, the law is reasonably clear on this issue . . .

Dale

 

[Aceyducey]

Hi DaleGG,

How about things like garden hoses & flues - do they count as fixtures?

Cheers,

Aceyducey

 

[littlemaze]

Hi Dale,

Thanks for the response.

As aceyducy mentioned, isn't the flue and hose a fixture and because they were under $300 can't I deduct them in the year of purchase?

 

[DaleGG]

Hi

Ooops, I thought i had replied, but, obviusly I just never got around to it. Sorry guys!

Yes, they could be argued as small items and subject to the Low Value Pool and deduction that way.

Dale

 

[littlemaze]

Hi Dale,

Thanks for the response.

I've had another thought - if I get a QS to come in after all of the work is done and get it included into the report, isn't that a way I can make these items (powerpoints, light switches etc) tax deductible?

 

[littlemaze]

Dale,

Any thoughts on my last post?

Thanks.

 

[DaleGG]

HI

Yes, it might work - depending upon your QS.

Dale