NRAS credit fee

I'm a first time investor with my first IP being NRAS compatible . An up front cost of $5500 creditation fee was required with the NRAS agent of which I was advised is tax deductible ( not including ongoing fees).
Now upon filing my tax return with an accountant I was advised that it wasn't deductible as it is considered a capital cost? WTF?
I spoke with the NRAS agent and they were adamant it is deductible similar to that of PM fees .

I'm confused and don't know who to believe .

Is the NRAS agent ripping me off?
 
It would be unfair for me to name and shame . I'm interested to see if anyone else has had similar experience or advice. I should of looked into it more before paying up. $5500 is a lot of money the more I think of it.
 
ok, if it were me I would yell it out for all to hear... it's just a statement of fact. is the charge legal? did you sign up for it?
 
Wow. $5,500 upfront fee is a lot.

As for whether it is tax deductible or added to the cost base - it does smell like the latter as it occurred prior to the property generating income for you. Just like Stamp Duty.
 
At best might be similar to a borrow cost and depreciable over x years ......

5.5 k sounds like a nice add on for someone.......

Ta
rolf
 
Can you please explain what the fee is, in more detail? What did it get you? Was it a cost the finance or property person charged you for advice? Was it part of the purchase price?

The person you bought the property through would already have been receiving a commission. And the broker you did the loan with would also have been receiving a commission. Sometimes a broker will add on a fee for service but 5.5K would be extreme in those situations.

I'd be asking the person who charged you the fee, to explain what it is for- EXACTLY.

It's these dirty little rip off merchants that ruin things for everyone trying to provide a good value product! If they have charged you a fee just because they can - they are greedy and you should name them. 5.5K on top of the comms they were already being paid (if that's what has occurred here) is outrageous.
 
I'm a first time investor with my first IP being NRAS compatible . An up front cost of $5500 creditation fee was required with the NRAS agent of which I was advised is tax deductible ( not including ongoing fees).
Now upon filing my tax return with an accountant I was advised that it wasn't deductible as it is considered a capital cost? WTF?
I spoke with the NRAS agent and they were adamant it is deductible similar to that of PM fees .

I'm confused and don't know who to believe .

Is the NRAS agent ripping me off?

NEVER rely on taxation advice from anyone but an accountant.

You can listen to tid bits from different people, but always get it confirmed with an accountant.

Maybe there's been a private ruling that the NRAS agent was taking his lead from????

But borrowing expenses can be claimed over 5 years or the period of the loan if less, but agent fees can not and are added to the cost base.

That's the difference here I think.
 
it does smell like the latter as it occurred prior to the property generating income for you. Just like Stamp Duty.

Where is the line drawn? Is it the 'property generating income' or the contract signed date?
Certain jobs like cleaning can happend in between those too time lines. It doesn't seem fair to add those costs to the capital cost.
 
Where is the line drawn? Is it the 'property generating income' or the contract signed date?
Certain jobs like cleaning can happend in between those too time lines. It doesn't seem fair to add those costs to the capital cost.

Doesn't matter what's fair though. It's the Tax Law :)
 
Linked this to an NRAS expert in the hopes of getting an informed response. Personally, my mind is boggled - I can't think what that fee might be for!
 
Some of the consortiums charge a fee to join their model, but Im not aware of any charging more than 2K. Almost all of them charge nothing at all as an up front fee.

Would like to know which NRAS consortium you are participating with, and who you purchased the property through?
 
sounds to me like you had a property that was NRAS potential but didn't have an NRAS certificate on it and paid for the privileged?
 
Can you please explain what the fee is, in more detail? What did it get you? Was it a cost the finance or property person charged you for advice? Was it part of the purchase price?

The person you bought the property through would already have been receiving a commission. And the broker you did the loan with would also have been receiving a commission. Sometimes a broker will add on a fee for service but 5.5K would be extreme in those situations.

I'd be asking the person who charged you the fee, to explain what it is for- EXACTLY.

It's these dirty little rip off merchants that ruin things for everyone trying to provide a good value product! If they have charged you a fee just because they can - they are greedy and you should name them. 5.5K on top of the comms they were already being paid (if that's what has occurred here) is outrageous.

This is interesting information . The "property group" is working together with another "housing group " whom is a nominated and approved government NRAS agent.
Is it true that an NRAS property can only be endorsed via a government approved agent?

I was advised by letter that the "property group "had received government approved credits and was obliged to pay the "housing group "$3850 for the NRAS credit "plus additional establishment costs and internal associated fees that total $5000 +gst " hence the $5500. The letter went on to say that if the fee isn't paid to the "housing group" I risked reallocation of credits to other purchasers. "this NRAS fee is tax deductable" quoted further in the letter.
I'm thinking there are too many middle men here?
I purchased the property through another group whom is in association with the "property group " in question , no wonder I was confused!!!
Now I have spoken with director of the "property group "who advised me that he was in the same situation and was able to claim the deduction with his accountant. My accountant contacted him also for further explanation and permission to speak to his accountant. Permission was denied and the explanation still didn't convince my accountant much to my disappointment .

I 'm still fishing around for answers hence why I have come to this forum as an avenue in my investigation . I must admit that I should of been more diligent at the start.
 
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