Solicitors Fees and IP Loan deductability

[Foxy79]

I am buying a new IP and plan to pay my increasing Solicitors fees with an separate I/O loan used only for the investment property as I would find it hard to pay from my wage.

Question is this alright to add this to the Loan and do a tax claim on the interest paid on the IP? Would i be tarnishing the IP loan and it deductability? I heard the Solicitors fees are tax deductable, over a seven year period? Please advise

 

[HD_ACE]

I am buying a new IP and plan to pay my increasing Solicitors fees with an separate I/O loan used only for the investment property as I would find it hard to pay from my wage.

Question is this alright to add this to the Loan and do a tax claim on the interest paid on the IP? Would i be tarnishing the IP loan and it deductability? I heard the Solicitors fees are tax deductable, over a seven year period? Please advise

I believe solicitor fees form part of the cost base. Other expenses incured in purchasing property can be deducted over 5 years or life of loan which ever is lesser.

See http://www.ato.gov.au/content/downloads/ind00313554n17290612.pdf

Cheers

 

[tvadera]

Hi,

I think solicitors fee, conveyancers fee, building and pest report fees, form part of cost base and are not deductible unless you sell a property. Best to check with accountant.

 

[Terry_w]

Hi,

I think solicitors fee, conveyancers fee, building and pest report fees, form part of cost base and are not deductible unless you sell a property. Best to check with accountant.

It may depend on what the legal fees are for.

 

[Propagate]

Isn't the OP question regarding the interest on the loan taken to pay the solicitors fees?

I'm not an expert, so don't take this as advice, but I thought the fees themselves need to be added to the cost base, but the interest on the loan used to pay the fees could be deducted on your returns?

Hopefully someone can clarify.

Cheers.

 

[Foxy79]

Yes Propagate, thats right. I was more aiming at whether I can add the Solicitor fees to the IP loan and come tax time, make a tax deduction on the intrest I paid for the year. The other part. Thankyou to HD ACE, tvadera & Terry W. It appears I cant claim lawyers fees as it is for the normal conveyancing and Contracts ect.