Hi all,
Again standard disclaimer – I will be seeking professional advice….
However I’d like to know a little more before meeting with my accountant – again!
Are purchasing costs which are added to the amount borrowed tax deductible or is it only the interest against the amount borrowed? I know that the principal of the investment property is not tax deductible so by purchasing costs I mean items like Mortgage Lenders insurance, stamp duty, bank processing fees etc, etc.
Cheers in advance…..later
Squash
Some think that this life is a rehearsal but I’m telling you that it’s the show baby!
There’s no business like show business…
i have just gone through the same questioning of my accountant and from what i understand is purchasing costs are added to the base cost ie
you bought for 100k
stamp duty legals (say) 26k
interest paid (say 10k
your cost base is now 136k
you sold for 200k so 200k – 136k= 64k
64k/2 = 32k
32k x 48 (your tax bracket)= 15360 you will pay in CGT. do not take this as gospel, your accountant will be able to work it out much better. but im pretty sure thats how it works.
cheers
shaunLead, Follow or get out of the bloody way
Talk to your accountant.
However, my recollection is that purchasing costs are not immediately deductable. Some get added to the cost base for CGT purposes. Others can be depreciated over 5 years.
regards,
Rod.
Hi Manic,
Acquisition costs such as conveyaning costs, property stamp duty, surveyors fees are not deductible but will be used when determining capital gains tax (if appropriate).
However borrowing costs such as loan mortgage insurance, loan establishment fees, title search fees, costs incurred in preparing mortgage and mortgage stamp duty are claimable over five years or the life of the loan (whichever is the shorter). If however loan costs are less than $100 then these are claimable in the year they were incurred.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Thanks Derek
Exactly the information that I was looking for.
Much appreicated… Squash
Some think that this life is a rehearsal but I’m telling you that it’s the show baby!
There’s no business like show business…
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