Repairs or improvements.

[nakal]

I have recently purchased an IP and I am planning to replace the curtains, repaint, install ceiling fans and install security screens to all windows. Am I right in saying that the fans and security screens are improvements and therefore not a tax deduction, and that repainting is a repair and tax deductible. How would the curtain replacing be classified, the existing curtains are old and need to be replaced.

If any of the above is incorrect can someone please correct me.

 

[DaleGG]

HI

You wrote:

Repairs or improvements. (post #1)

I have recently purchased an IP and I am planning to replace the curtains, repaint, install ceiling fans and install security screens to all windows. Am I right in saying that the fans and security screens are improvements and therefore not a tax deduction, and that repainting is a repair and tax deductible. How would the curtain replacing be classified, the existing curtains are old and need to be replaced.

If any of the above is incorrect can someone please correct me.

The tax office do not allow tax deductions for any repairs within the first year of ownership unless the damage is caused by the tenants.

The fans, curtains and security screens will be depreciated and the painting will be a capital item that you cannot claim although it will reduce your CGT in years to come when you sell the IP.

I'm sorry to bear bad news.

Dale

 

[geoffw]

Dale,

Can the improvements be a part of cost of plant (at 2.5%)? Or at a higher rate if applicable (if the items were listed on a QS report, for instance, at 20% pa could that depreciation be claimed?)

Geoff

 

[DaleGG]

Hi Geoff

Yes, they can if identified by a QS in their reports.

Have fun

Dale

 

[duncan_m]

Originally posted by DaleGG
HI

You wrote:

The tax office do not allow tax deductions for any repairs within the first year of ownership unless the damage is caused by the tenants.

Does anyone have any ATO references to this treatment of repairs in the first year?

Thanks, Duncan.