Just about to start a cosmetic reno on PPOR and will move out while the work gets completed and then rent it out. Given that I still owe $200k on it and reno costs should be $30-$35k I am a bit confused where this leaves me tax wise. My understanding is as follows:
1. The Reno costs are generally capital in nature and are not immedietly deductable but can be depreciated.
2. The original $200k loan interest repayments become tax deductable once the property is available for rent? From when the renos are finished I imagine??
3. I intend to refinance the $200k loan to fund the renos from equity within the property. Interest on the money used for the renos should be tax deductable as well??
4. Should also be able get some increased depreciation from fittings/fixtures that are replaced or taken out that still have effective life left???
Does this sound right. Any help would be appreciated.
regards
mojoman
1. The Reno costs are generally capital in nature and are not immedietly deductable but can be depreciated.
2. The original $200k loan interest repayments become tax deductable once the property is available for rent? From when the renos are finished I imagine??
3. I intend to refinance the $200k loan to fund the renos from equity within the property. Interest on the money used for the renos should be tax deductable as well??
4. Should also be able get some increased depreciation from fittings/fixtures that are replaced or taken out that still have effective life left???
Does this sound right. Any help would be appreciated.
regards
mojoman