IP to PPR and buying white goods

[redsquash]

I expect my IP will revert to my PPR in early 2011.

The white goods, air-conditioner curtains and carpet need replacing. The house has been an IP for many,many years and is looking warn.Things are wearing out.
The garden needs massive attention and maintenance,

Can I deduct 100% of the costs of the full amounts after the house is a PPR or must these items be attended to when house is a rental property.

My understanding is I have until June 30 2011 in which I can claim these deductions.

 

[Ms Jade]

Garden maintenance would be a 100% deduction but the rest sound like capital works rather than repairs so would be depreciated, not expensed. Hopefully you have an existing quantity surevyors report (if not, get one). This way you can at least write off the value of the white goods, curtains etc when you throw them out.

I'm not sure on the timing thing, but I believe I've heard as you have re: within the same FY is OK.

 

[Brett IP]

Yeah as per Ms Jade

You have to differentiate between capital improvement and repairs/maintenance expenditure. DEFINITELY get a quantity surveryors report done, I gained a massive deduction in a similar scenario. However considering the place has been an IP for many years I would assume the depreciation has already been applied & the goods are now valued at $0?

You cannot claim replacement capital expenditure when it is now PPOR as you will be gaining the benefit from the new product as its useful life extends from now forward. Different case if it was remaining IP (depreciation would apply)

Yes, replace these in the same financial year that the property ceased to be IP & you will be able to claim some of the expense as depreciation!

Cheers

 

[marg4000]

White goods, curtains, airconditioner and carpet cannot be claimed in full at any time as these are depreciable items. These items will have been fully depreciated by now if their condition is so poor, so you have already received the tax benefit for their use.

The new items are for your personal use. Should you continue to rent the property these items can be depreciated against the rental.

You may gain a minor benefit by replacing these items while the property is still rented and therefore able to claim proportional depreciation, but this is offset by the fact these items will not be brand new when you move in and you run the risk of minor "wear and tear".
Marg

 

[Mry]

This way you can at least write off the value of the white goods, curtains etc when you throw them out.

Unless they are in a low value pool, in which case the disposal of the asset reduces the value of the pool. A taxable loss only occurs if the value of the pool goes below zero.

There's no good news when you replace depreciable assets in a rental property that will turn into a PPOR. The tax deductions disappear when you walk in the front door. On the other hand, your tenants will not have the ability to do things to your new whitegoods such as turning your fridge into an outdoor pot plant.

 

[redsquash]

Unless they are in a low value pool, in which case the disposal of the asset reduces the value of the pool. A taxable loss only occurs if the value of the pool goes below zero.

There's no good news when you replace depreciable assets in a rental property that will turn into a PPOR. The tax deductions disappear when you walk in the front door. On the other hand, your tenants will not have the ability to do things to your new whitegoods such as turning your fridge into an outdoor pot plant.

Are you saying the date the Investment property reverts to a PPR you loose all depreciation deductions on assets (depreciation would be calculated pro rata for the year) but expenses claimed within the financial year to June 30 are OK.
eg fumigation, fixing leaking taps or repairing holes in wall, repairing steps, replacing locks , etc are OK after even the property reverts to a PPR.