LOC & buy/reno/hold

I'm organising a LOC on my existing PPOR.
I understand the purchase costs can come straight out of that, and the interest will be tax deductible. Is that right?

In implementing a buy-reno-hold strategy, I was also going to take the reno expenses out of the LOC. The reno will happen either before first rent OR possibly on rent renewal if property is already rented. Is the interest on the reno funds from the LOC tax deductible?

Thanks!
 
I'm organising a LOC on my existing PPOR.
I understand the purchase costs can come straight out of that, and the interest will be tax deductible. Is that right?

In implementing a buy-reno-hold strategy, I was also going to take the reno expenses out of the LOC. The reno will happen either before first rent OR possibly on rent renewal if property is already rented. Is the interest on the reno funds from the LOC tax deductible?

Thanks!

Assuming you are going to buy an investment property then the answer is generally yes to both questions. Take straight from the LOC without any diversions and the interest should be deductible.

Becareful paying an item on a credit card and then paying this credit card off with the LOC. if there are other expenses on the card this will make things tricky.
 
Thanks Terry.
I was pretty sure about the purchase costs but concerned about the reno costs.

Is it correct that the actual reno funds would (entirely/mostly) be added to the cost base for CGT on sale? At least those bits that weren't part of the depreciation benefits during ownership?

Is it correct that the fees part only of the purchase funds (which are deposit + various fees) would be added to the cost base for CGT on sale?
 
Thanks Terry.
I was pretty sure about the purchase costs but concerned about the reno costs.

Is it correct that the actual reno funds would (entirely/mostly) be added to the cost base for CGT on sale? At least those bits that weren't part of the depreciation benefits during ownership?

Is it correct that the fees part only of the purchase funds (which are deposit + various fees) would be added to the cost base for CGT on sale?

1. Yes sort of. I would also expect these costs would enable depn and Cap Allowances to be claimed. The deductions would erode the cost base over time. Well worth doing anyway. (50% better off)

2. Fees for ?? eg Bank fees = 60mths deductible. Survey, council etc yes add to cost base.

Very important to get QS report opinion BEFORE starting and final report AFTER completion.
 
Thanks Terry.
I was pretty sure about the purchase costs but concerned about the reno costs.

Is it correct that the actual reno funds would (entirely/mostly) be added to the cost base for CGT on sale? At least those bits that weren't part of the depreciation benefits during ownership?

Is it correct that the fees part only of the purchase funds (which are deposit + various fees) would be added to the cost base for CGT on sale?

Deposit is part of the purchase price
 
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