Painting and New Carpet Tax Deductable?

[bergs]

A Property is purchased as IP for at least one year with intention to become PPOR later.
If I repaint the property as a genuine maintenance situation towards the end of the first year lease, is the total cost tax deductable?
Also, the same situation with the carpet, it needs replacing. Is the replacing of the carpet a year after having the IP a tax deduction?
And also, the current building inspection (at time of purchase) states that the bathroom needs major repair work due to water damage and leaks, if these repairs are carried out and a new bathroom is required, are the costs claimable as a repair or do they constitute a capital expense?
And one last question, all of the above mentioned repairs will be carried out at the time of the property being an IP (and will be claimed) but it will become a PPOR shortly after - are there any tax implications in this?
Can any of our fellow forum members with a bit more tax experience than I, please assist me in these questions.
Thanks,

Wendy Bergsma

 

[DaleGG]

Hi Wendy

>A Property is purchased as IP for at least one year with >intention to become PPOR later.
>If I repaint the property as a genuine maintenance situation >towards the end of the first year lease, is the total cost tax >deductable?


Yes, as you are then repairing the damage caused by fair wear & tear and caused by tenants.


>Also, the same situation with the carpet, it needs replacing. Is >the replacing of the carpet a year after having the IP a tax >deduction?


If ther is any depreciation left on the original carpet, it will be written off as an immediate tax deduction when you replace it. The new carpet will be depreciated for as long as you have the property available for rent.


>And also, the current building inspection (at time of purchase) >states that the bathroom needs major repair work due to water >damage and leaks, if these repairs are carried out and a new >bathroom is required, are the costs claimable as a repair or do >they constitute a capital expense?


As the damage was there when you bought the property, and identified as such, you are unlikely to get a tax deduction for repairing this.


>And one last question, all of the above mentioned repairs will be >carried out at the time of the property being an IP (and will be >claimed) but it will become a PPOR shortly after - are there any >tax implications in this?

No, none at all.


Have fun

Dale