Renovation Tax claims vs depreciation

Hi,
I am wondering if there is a thread already about the following:

Question about depreciation etc on an investment property.
I gather I need to separate the chattels put in to the renovation like washing machines/lounge chairs/TV from the actual construction/building/reno costs (which were paid for with the bank loan)?? (the house is let as fully furnished).

So can I pay for the construction/renovations with the loan money from the Bank and claim the interest, but the chattels/furniture are to be paid for out of my pocket and then claimed as depreciation against my personal tax (house was bought in my name).

Have I got it right?
thx,
JB
 
Nah bradje, you got it all screwed up.

Borrow money for a reno. Interest on borrowings is tax deductible. Reno is depreciable at whatever the rates are - diff %'s on diff parts of the reno.

Borrow money for furtniture. Interest on borrowings is tax deductible. furniture is depreciable at whatever the rates are.

Get a QS to do a depreciation report and he will separate out the items and their diff %'s.
 
Nah bradje, you got it all screwed up.

Borrow money for a reno. Interest on borrowings is tax deductible. Reno is depreciable at whatever the rates are - diff %'s on diff parts of the reno.

Borrow money for furtniture. Interest on borrowings is tax deductible. furniture is depreciable at whatever the rates are.

Get a QS to do a depreciation report and he will separate out the items and their diff %'s.

Thankyou very much....Appreciate setting me straight.
Doesn't that mean though that i will be claiming interest and depreciation on some items...Isn't that double-dipping into the ATO? That's where I'm confused.

cheers,
JB
 
Doesn't that mean though that i will be claiming interest and depreciation on some items...
Yes - interest on the loan used to by the item and depreciation on the item itself.

Isn't that double-dipping into the ATO? That's where I'm confused.
No, they are 2 different things. e.g. You take out a mortgage to buy the property - the interest is deductible. But the building (if new say) depreciates at the rate of 2.5% pa for 40 years.
 
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