As a recent newcomer to property investment I would appreciate the thoughts of the more experienced players on reno's replacements and repairs. This may sit better in the tax section but I thought the value adders in this section would have gone through this scenario.
I understand that a repair is tax deductible but a replacement becomes part of the capital base and may then be depreciated. I've also read comments like 'don't replace your fence all at once, do it in stages as repairs' All well and good but in reality what do people do in practice? Fixing a fence in three goes over several tax years would be a bit of an inconvenience...
We bought a property at the beginning of the year and put tenants straight in. In an ideal world the kitchen and bathroom should be replaced, but we will have to wait for an appropriate time when the place is non tenanted to do it. An opportunity has come up with the bathroom though, some tiles have fallen off and broken and they can't be matched in. Is this an excuse to retile the whole bathroom and call it a repair? Could we 'repair' the tiles and replace the vanity and taps?
I guess I'm asking whether people bother to work these manoeuvres with an eye on tax, or whether they just go ahead and do whatever has to be done.
I understand that a repair is tax deductible but a replacement becomes part of the capital base and may then be depreciated. I've also read comments like 'don't replace your fence all at once, do it in stages as repairs' All well and good but in reality what do people do in practice? Fixing a fence in three goes over several tax years would be a bit of an inconvenience...
We bought a property at the beginning of the year and put tenants straight in. In an ideal world the kitchen and bathroom should be replaced, but we will have to wait for an appropriate time when the place is non tenanted to do it. An opportunity has come up with the bathroom though, some tiles have fallen off and broken and they can't be matched in. Is this an excuse to retile the whole bathroom and call it a repair? Could we 'repair' the tiles and replace the vanity and taps?
I guess I'm asking whether people bother to work these manoeuvres with an eye on tax, or whether they just go ahead and do whatever has to be done.
