Swimming pool

I'm about to buy an IP with an empty inground swimming pool. The property is currently tenanted. The pool needs a new pool liner, a pump/filter, a cover and a safety fence installed! It will cost me over $10K for those items.

Can I claim deduction/depreciation on those items and at what rate per year?

Can I buy a safety cover & temporary cover the pool until we move in in 2 or 3 years time? There isn't an easy access to fill the pool up with soil. Is there any other options?

Thanks in advance

Regards

Huey
 
vh2000 said:
I'm about to buy an IP with an empty inground swimming pool. The property is currently tenanted. The pool needs a new pool liner, a pump/filter, a cover and a safety fence installed! It will cost me over $10K for those items.

Hi vh2000,

You havent said where the property is, but Im assuming the current tenants are used to a pool with no water...

Offer the vendors $10,000 less than they are asking. See where they go from there...

Do you want the pool for the tenants, or do you want it for yourself at some future stage?

Jamie
 
Last edited:
Thanks Jamie,

I've tried but I don't think I will get any discount. It's a good buy.

I don't understand why the current owner could let the house with an almost empty pool & without a safety fence. I can't do anything until after the settlement and it will take time to have everything installed. I plan to erect the safety fence on the first day after the settlement. I'm already worried so much about it. What if someone falls into the empty pool & gets hurt, can he/she sue me ? If I set up a Trust and buy the property will it protect us from financial liability in this case?

I think it's better not to provide the swimming pool for the tenants but I don't know what to do with it. It's not easy to remove the pool either.

Regards

Huey
 
Last edited:
Huey,

Why not have a pool person call and give you an assessment. The pool may be partially empty because it leaks.

If you intend to move in yourself then it may be worth persevering with. If it is leaking and too expensive to fix then rip it out or fill it in.

If the tenants are not used to having a poll then the decision is yours, either way make sure that it is safe.

If you want to keep it, then I agree that a safety fence would be essential for peace of mind and protection from liability.

You could create a sunken garden if it is leaking or too old to fix.
 
vh2000 said:
I'm about to buy an IP with an empty inground swimming pool. The property is currently tenanted. The pool needs a new pool liner, a pump/filter, a cover and a safety fence installed! It will cost me over $10K for those items.

Can I claim deduction/depreciation on those items and at what rate per year?

Can I buy a safety cover & temporary cover the pool until we move in in 2 or 3 years time? There isn't an easy access to fill the pool up with soil. Is there any other options?

Thanks in advance

Regards

Huey


There's some funny rules about pools and depreciation.. I dont have a link handy but I do recall a ruling or intepretive decision that suggested you could NOT depreciate them as they were considered leisure items and not central to the income producing asset.. I may be wrong and would suggest one of our beloved Accountants here might be able to shed some light.
 
vh2000 said:
I can't do anything until after the settlement and it will take time to have everything installed.
It may be possible to negotiate access to the property before settlement.
 
duncan_m said:
There's some funny rules about pools and depreciation.. I dont have a link handy but I do recall a ruling or intepretive decision that suggested you could NOT depreciate them as they were considered leisure items and not central to the income producing asset.. I may be wrong and would suggest one of our beloved Accountants here might be able to shed some light.


OK I found the case I recalled.. Woodward vs God.

http://64.233.187.104/search?q=cach...c+woodward+rental+site:.au+pool+leisure&hl=en

In which the AAT decided:

40. In examining the function of the pool and spa, the Tribunal concludes that the pool and spa play a passive role in the process of earning income from the Property. The pool and spa have no other function then in providing entertainment and leisure to the tenant.

41. Unlike the caravan situation, the pool and spa do not provide a function that so special or so related to the income from the rental of the Property of the Applicant. Therefore, the Tribunal concludes that the pool is not plant for the purposes of the Act and the Applicant is not entitled to deduction under section 42-15 of the Act.


Maybe its been overturned, clarified, legislated, intepreted, ignored, challenged, withdrawn since.. don't know.. worth checking with your Accountant.
 
I bought an IP 5 years ago with an empty / unusable pool. It had a crack in it not worth fixing. The property is a "knock down job" so I did see any value in fixing up the pool. Instead I had it jack hammered so it drains efficiently when it rains. Then covered over with a tarpoline. Im sure landlords would need to take all due care with making the property safe. Fortunately I have elderly tenants with no young kids around

I would get a clearer picture on what the pool make cost to get in safe / working order before putting an offer on the place if its not too late. Also depending on the long term plans of the property ( develop etc) assess whether its worth investing money in fixing up the pool.

Further to points previously raised about not being able to claim any repair costs for tax, the ATO general considers any repairs made at the time of purchasing a property not to be deductible but rather added to the cost of the property for CGT purposes
 
Thanks,

As I mentioned before it would cost me < $10,000 to make the pool usable (to install a new pool liner, pump, filter & cover) and safe (to install a safety fence). The tenants want to use the pool but I don't think they will pay more rent for it. At least I provide a safe environtment to avoid future ligitations.

I can claim from 2.5 - 7% depreciation a year for the $10,000 expenses.

http://www.ato.gov.au/content/downloads/NAT1729-05.pdf

Hi Ross,

Where can I get a "tarpoline" and is it safe?

Regards

Huey
 
VH
The tarpoline was just from Bunnings. Just pegged it in at each corner and put a small hole in the middle so it doesnt retain water.
If you have tenants with kids I dont know if this is a safe option though.
Whatever you end up doing make sure the tenants are happy with it, suggest maybe to incorporate something in the tenancy agreement so both parties are legally acknowledging what is to be done with the pool. Get the agreement stamped by State Rev
 
I would not think a tarp would hold much weight if a drunk person fell on it. A company called swim and sun safe in Moorabbin vic rent out timber covers for pools such as yours. You could also build a deck over the top. Knock a hole in the pool so the water drains. A deck should not cost you much more than a fence, and build it in such a way that you can relocate it next to the pool should you decide to refurbish the pool at a later dated. (ie use bolts and screws for joists etc, where possible instead of nails)
 
Thanks,

The pool is 4.5m X 9.0m. I thought about building a deck but it appears not feasible because we can't build vertical supporting posts. I will phone around to find out.

Regards

Huey
 
Duncan,

You are confusing Division 40 (depreciation allowances) with Division 43 (capital allowances). This case merely showed that the pool was not plant and therefore not depreciable under division 40 but will be allowed for capital allowance purposes (2.5% in most cases) under Division 43. Rules havent changed.

Pools and associated equipment can be depreciated just not as plant which operates under Division 40 but as a capital improvement integral to the building which is captured under Division 43.
 
I have had some strange reports from Quantity Surveyors over the years. One QS did a new resort unit and claimed the cost of the owner's share of the pool construction at 10% diminishing, and the cost of the filter at 20% diminishing. I told the client the cost of the pool claim was strange.
 
vh2000
I don,t think you will know if the pool leaks until you fill it.WATER CHARGES!!!

Why not ring a couple of 2nd hand pool companys and sell/give it to them they remove at their own cost.
Also ask if they have sand/dirt to get rid of. They have to dig holes to put pools in and it cost them to dump the soil.
Or if you just leave the pool jackhammer a few holes in it for drainage and put a sign up out the front "clean fill wanted" you can fill it in for free.Hopefully there is good wide access to the pool area.Lotta barrow work if not!
cheers yadreamin
 
Yes Yadreamin,

The pool had been filled up to the top twice by the tenants. Both times the water level came down to about 40 cm from the bottom of the pool. The runaway water flooded the vegie garden!

It's a 30 years old modular pool. One poolman said the old pool liner was removed & it needed a new pool liner ($5K) . Thanks for your suggestions I will find out more about those options. I don't think I could fill it up myself!!! One exacavation man came to have a look at the pool. He gave me a lift on his big truck. It's fun. He will give me a quote soon.

Regards

Huey
 
Now I have a make a decision out of the following options:

1. It will cost me $5K to have the pool filled up with dirt + unknown costs to repair damage caused by the bobcat ( rebuild 2 m of the retaining wall + repair to the printed concrete paving area if possible). It will cost $1K more to remove the pool walls or

2. To build a deck on top of the pool will cost approx $5K (a rough estimate over phone) or

3. To replace the pool liner : $7K + sand filler : $1.6K + fence + $3K + pool cover : 1.5K + .... or

4. Forget about buying this house.

:confused:

Huey
 
Hi vh 2000,

Are you sure you can't go back to the owners and get a reduction on the asking price based on this information.

5k sounds a bit much to fill in the pool IMHO.

Regards

Jared
 
Thanks Jared,

It's a big pool 4.5m by 9 m & access to do the work is not straight forward. The builder will have to knock down 2m of the 2-level retaining wall to put a ramp for the bobcat to drive in/out.

The owner said "take it or leave it" & because of the state of the pool he already reduced the price by $5K from what he wanted.

I'm not sure if I can claim tax for the cost to fill up the pool. Does anyone know?

Regards

Huey
 
Back
Top