All Topics / Legal & Accounting / Deposit on house purchase

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  • Profile photo of RegrowRegrow
    Member
    @regrow
    Join Date: 2004
    Post Count: 77
    July 28, 2005 - 7:01 am

    Hi

    Senario: If I have signed up for a home to be built from a home building company in my trusts name. The plans were drawn up etc, but I was not able to obtain finance.

    My question is in regards to the deposit paid to the builder, which had been spent on surveyors, having the plans drawn up etc, and since I was unable to obtain finance would the deposit be tax deductable as it was paid to obtain an income producing property?

    Any feedback would be much appreciated.

    Regards

    Regrow

    You are a fool for 5 seconds if you ask a question, but a fool for life if you don’t.

    Profile photo of coastymikecoastymike
    Participant
    @coastymike
    Join Date: 2005
    Post Count: 125
    July 28, 2005 - 9:44 am

    Not deductible under Section 8(1) of ITAA or Section 25-25 as a borrowing cost. Refer to Ronpibon v FCT and Maddalena cases. Would ordinarly form part of the capital cost of the asset.

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