Pre-lease renovations

[JT87]

I have recently purchased an investment property in Logan, it is currently advertised for rent.
Prior to tenants moving in I am having a few renovations carried out and wanted to check which of these will be tax deductible, as far as I am aware, improvements are non tax deductible but repairs are.

Renovations include-

-Repairs to exterior timber staircase and handrails, these were requested by the property manager prior to tenancy as the existing timber was rotten and considered unsafe.
-Additional toilet downstairs, a room already existed to have one built in, already tiled, toilet never fitted.
-Carpet in two bedrooms downstairs, these were just a concrete floor.

Also, should I wait until 15-16 Financial year to carry out a depreciation schedule?
From what I have seen, BMT will start the depreciation from settlement date, so the sooner I can organize this, the better?

 

[jrc]

All non- deductible as they are initial repairs ie repairs because of the condition of the premises when you purchased.

 

[wombat777]

Also, should I wait until 15-16 Financial year to carry out a depreciation schedule?
From what I have seen, BMT will start the depreciation from settlement date, so the sooner I can organize this, the better?

I've got my IP settling 23 June and then a week of repairs and tidy-ups is planned. I'm guessing at least $10k of work ( adding a handrail, fixing some stairs, water-compliant cistern, minor electrical (safety) work, some painting, new carpet in one room ). My thought has been to have the depreciation schedule done 1 July, however not sure if this is right. The property won't be advertised for rent until approx 1 July until a week of works is completed and new photos can be taken.

 

[Terry_w]

Sounds like capital works and you should be able to depreciate.

 

[Paul@PFI]

I would organise for depn schedule and make sure you provide the QS with full details of the work you have completed so that the cost can be incorporated and the appropriate method for write off made.

 

[BMT Tax Depreciation]

Renovations include-

-Repairs to exterior timber staircase and handrails, these were requested by the property manager prior to tenancy as the existing timber was rotten and considered unsafe.
-Additional toilet downstairs, a room already existed to have one built in, already tiled, toilet never fitted.
-Carpet in two bedrooms downstairs, these were just a concrete floor.

Also, should I wait until 15-16 Financial year to carry out a depreciation schedule?
From what I have seen, BMT will start the depreciation from settlement date, so the sooner I can organize this, the better?

Check with your accountant re the stairway maintenance but, depending on the scope of the works, you could probably depreciate it if you can't claim it another way. You'll definitely be able to depreciate the carpet and toilet.

There is no difference whether you wait or not; the contents of the report will be the same. The only real factor is: which financial year do you want to claim our fee in? 2015 or 2016?