Tax deduction for owner repairs

Discussion in 'Accounting and Tax' started by bumblegoodie, 17th Jun, 2015.

  1. bumblegoodie

    bumblegoodie Call me BG

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    Hello tax experts,

    Iam currently doing some handywork myself for one of my previous tenanted damaged investment property.

    It is very hard work and possibly the last time i'll be doing this type of hard labour work.

    I have kept all the bunnings receipts and recorded time spend on the property.

    The IP is not rented for three months now and my is almost ready for renting soon.

    What iam asking is can i claim the "repair" type expenses even though the property have been vacant for 3 months out of the 12 month period?


    thank you =) you guys are the best!!!!
     
  2. depreciator

    depreciator Member

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    You have been repairing damage/deterioration that occurred while you were renting out the property? I reckon that would be fine.

    You can't claim your own labour though.
     
  3. bumblegoodie

    bumblegoodie Call me BG

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    no no. the tenant was renting it before and left with a mess.

    Iam repairing the property back into livable condition before putting back onto the rental market.

    Understand all my labour hours can not be claimed as deduction. But does the bunning receipts and other repair bill - could they claim for tax deduction even though it is vacant for a period?
     
  4. Paul@PFI

    Paul@PFI Tax, SMSF & Planning

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    It would be subject to what these repairs are. Some can be capital in nature. eg replacing carpet. Other deductible yes. ie repainting walls. The receipts etc may assist to determine this. Even photo's if ATO query things.

    The property may be available to rent even while its off the market. Each case on its merits.

    This issue can demonstrate benefits of a tax adviser who can address your specific issues.
     
  5. GreyGhost

    GreyGhost Member

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    Yes. As damage relates to a period from when it was income producing.
     
  6. Coconutwheels

    Coconutwheels Member

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    What if you had an actual handy man business, run through a company. Could you charge it out to yourself as you would any other job?
     
  7. Scott No Mates

    Scott No Mates ...and people wonder why?

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    If the handyman business was a Pty Ltd company - yes.
     
  8. Rizwan

    Rizwan Member

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    You may be able to charge it to the PTY Ltd at arms lengh rate however this will need to be included as Income in the Pty Ltd.

    So effectively you will receive a tax deduction in your personal name and declare whatver you have charged as labour in the company as income.
     
  9. shorty

    shorty Member

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    Out of curiosity, if the carpet costs less than $300 (cheap DIY job), can you claim the depreciation up front?
     
  10. depreciator

    depreciator Member

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    Yep, if the replacement carpet is less than $300 you claim it in full.