questions regarding allowed deductions

Hi,

A few queries regarding deductions:

I have a property that I am preparing to convert to a IP shortly. It's currently my PPOR and I received a stamp duty discount in VIC on the condition that it is not used as an IP for the first 12 months.

This property has a bathroom that I have never used (I used ensuite) and after we bought it we realised the tiles were coming away and needed repair and the plaster board behind it needed replacing. The bathroom plaster has been replaced and retiled. Can I claim this even though the job has been completed prior to renting? The bathroom still has not been used by me.

I also have just replaced the carpet in one room as it was uv and water damaged. This room is currently empty and also won't be used by me before the house becomes an IP.

Can I claim these costs (even though It currently isn't an IP)? These jobs have been done in order to rent the place out.

I will also be getting the carpets steam cleaned, tax depreciation survey etc, just prior tennants coming in. Should I wait until it's been more than 1 year since I bought the place or does it not matter if it's a few weeks prior for tax deduction purposes?

Thanks in advance.
 
Can I claim these costs (even though It currently isn't an IP)? These jobs have been done in order to rent the place out.

No. They are capital works, or "initial repairs" which are depreciated at 2.5% per year, and not immediately deductible in full.

Repairs are only deductible if they are to fix things that have worn or broken while generating income. Since the place has not yet earned income very little will be deductible and almost everything will be an initial repair or capital work.

By the same rules, had the place been an IP for 10 years and you wanted to make it a PPOR, a renovation to bathroom and kitchen that has wear and tear from a decade of tenant's abuse would be deductible.
 
I thought you could claim for items required to get it ready for renting as long as it was being advertised for rent. In other words it was on the market
 
I thought you could claim for items required to get it ready for renting as long as it was being advertised for rent. In other words it was on the market

You thought wrong. If you buy a depreciated asset, the cost of making it new is capital improvement not an expense.
 
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