Pest Control Barrier Installation

[Bantam Roosta]

I am getting a chemical termite barrier done at one of my IPs, cost approx $2,500.

How is this expense treated for tax purposes? Is it an immediate tax deduction when I do it, or does it form part of the purchasing costs, or is it depreciated over x years? Does this change depending on when I do it (immediately after settlement, or later on)?

BR

 

[Paul@PFI]

Is it an existing IP ? Or a new acquisition ?

It would seem to be capital in nature as it preserves and protects the building and is affixed to the building (??) - maybe just the land... and incapable of being separated. Not depreciable as a fixture or a fitting but I would see what Depreciator says. A physical barrier during construction would be eleigible for cap allowance but this doesnt seem to be that type. Or is this barrier just a cost base increase ?

A termite treatment to kill existing termites would be very different to a treatment to protect from a future termite as a barrier. Such an expense could represent a repair provided its not an initial repair.

 

[Bantam Roosta]

Thanks for your comments Paul.

It is for an existing IP I have just purchased. I will get the treatment done after settlement. The treatment is all external to the building, but does involve drilling into the concrete every ~30cm or so. Definitely incapable of being separated.

What about an annual pest control spray (cockroaches etc). This can not be separated from the building, yet it is deductible in the year it is paid?

All so confusing. Yes, this is why we have highly trained professionals to work it out for us, but I like to understand what is going on and tax just does my head in beyond the basics.

BR