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From: Glenn M
Hi guys,
The buy and renovate process is becoming increasingly more common out there with IPs at the moment.
However, my understanding is that if you buy a property and renovate before you start earning income from that property (before you get a tenant), the costs of renovating are NOT able to be claimed (i.e. either through the 2.5% allowance or depreciation). Instead they will form capital costs (only to be taken into account in the cost base of the Property).
Now, some of you may say, how about renovating after you have a tenant. But, you would obviously want the tenant to see the Property after renovations so as to negotiate a higher rental fee.
My question, how do people get around this problem? There must be ways of thinking outside the square?
Any help would be appreciated.
GlennM.
Hi guys,
The buy and renovate process is becoming increasingly more common out there with IPs at the moment.
However, my understanding is that if you buy a property and renovate before you start earning income from that property (before you get a tenant), the costs of renovating are NOT able to be claimed (i.e. either through the 2.5% allowance or depreciation). Instead they will form capital costs (only to be taken into account in the cost base of the Property).
Now, some of you may say, how about renovating after you have a tenant. But, you would obviously want the tenant to see the Property after renovations so as to negotiate a higher rental fee.
My question, how do people get around this problem? There must be ways of thinking outside the square?
Any help would be appreciated.
GlennM.
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