I recently purchased an investment property (the settlement was in early June) and I have spent quite a lot of money renovating it since then. I?m just wondering whether I will be able to claim any of that for tax this financial year as the first loan repayment isn?t due until early July (the next financial year) and I probably won?t have any tenants in there until July either?
Tax question regarding June purchased investment property
- Thread starter Moree
- Start date
Probably not. Most likely to be initial repairs and therefore added to the cost base. When the tenants occupy the property from is not that crucial, it is more about when it is available for rent. Would be worth getting a depreciation schedule done if you have finished the renovations. That would be deductible this year.
So just to be clear, if the apartment isn?t available to be rented until July, then I won?t be able to claim anything in my tax return even though I purchased it this financial year? It was a very rundown apartment so the new carpet/painting/bathroom renovations were absolutely necessary before renting it out (I don?t ever plan to live in it myself).
The principle behind initial repairs reflects that you paid less for the rundown state and you incurred costs to bring it to a condition you find acceptable. If two identical properties were sold one reno'd and other not the dump would be cheaper and that discount should reflect the cost to make good the condition. So its capital expenditure just like the cost of the house.
Thats the principles behind the ATO denying deductions. The ATO view is here. The whole publication is worth reading and understanding.
You shoud get a depreciation schedule.
Thats the principles behind the ATO denying deductions. The ATO view is here. The whole publication is worth reading and understanding.
You shoud get a depreciation schedule.
Correct , nothing's claimable (even non capital expenditure) unless its rented, or available to rent.
Hey peeps,
I'm in a similar situation.
This is IP#2
Settled on 10th May 2014
Advertised and available for rent from 19th May 2014.
Tenants have now moved in effectively from 3rd July 2014.
1. If i get a depreciation schedule done now and request for the report to be back dated to last financial year (30/06/14), can the Depreciation still apply for the last financial year?
(even though the property did not have tenants, but was advertised since May 2014)
2. Have any investors requested a Depreciation report (with QS) whilst there were tenants inside the property? Does this is any way affect the surveyor?
Thank you
k88k
I'm in a similar situation.
This is IP#2
Settled on 10th May 2014
Advertised and available for rent from 19th May 2014.
Tenants have now moved in effectively from 3rd July 2014.
1. If i get a depreciation schedule done now and request for the report to be back dated to last financial year (30/06/14), can the Depreciation still apply for the last financial year?
(even though the property did not have tenants, but was advertised since May 2014)
2. Have any investors requested a Depreciation report (with QS) whilst there were tenants inside the property? Does this is any way affect the surveyor?
Thank you
k88k
Rather than being uncertain its better to get personal advice that is based on facts. Under and overpaying tax are both a concern. A tax return with first years ownership + large repair deduction and no income is a ATO red flag. So getting it right will save money.
There can be deductions to claim even if there is no income. Importance is maximising what is permitted.
The QS reports will be based on the date available for rent. Its one of the questions they ask. For the period between the start date and 30 June some deductions can be claimed eg interest, rates, water etc. Some not.
Happy to discuss no cost. Probably the most common question my SS clients ask.
There can be deductions to claim even if there is no income. Importance is maximising what is permitted.
The QS reports will be based on the date available for rent. Its one of the questions they ask. For the period between the start date and 30 June some deductions can be claimed eg interest, rates, water etc. Some not.
Happy to discuss no cost. Probably the most common question my SS clients ask.
