I have a 6 month old property which is currently my PPOR but I’m intending to turn it into an IP very soon. I was provided with a depreciation schedule on settlement. What happens to the scheduled depreciations for the period when the property was my PPOR after I’ve turned it into an IP? Will they simply vanish into thin air, or can I have the schedule redated so that the depreciations start from the start on the date that I start treating the property as an IP? I would loose a lot of tax deductions if I chose the diminishing value method and simply discarded the first 6 months to a year of depreciations, so I’m sure you understand my concern…
Would it be an option for me to have a brand new schedule created based on a new evaluation, or is this something that once it’s done that’s what I’m stuck with?
Any ideas would be welcome.
Im not an accountant, but I dont think you could claim any expenses (depreciation included) unless you have an income from that property to claim them against.
We buy properties in Adelaide. Immediate Cash Settlements, No Real Estate Agents, No Fees.
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phone 0412 437 582When I rent it out (and thus turn it into an IP) it will be. My question relates to deductions on depreciations I was entitled to before that point (if it had been an IP), but that I didn’t use (because it wasn’t an IP then).
you may need to commission a new dep sched as of the date it became an IP – no deductions apply to the period it was owner occupied, they are simply forfeited.
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker BrisbaneHi Carl,
As you know, the building depreciates at a fixed rate of 2.5% per year.
Your main concern is the Depreciating Assets (Fixtures and Fittings).
Strictly speaking, the depreciation clock starts ticking from when you acquire the assets i.e. settlement. So there is some depreciation you will lose. There is a way to ‘slow down’ the clock, though. This will legitimately minimise the amount Assets are written down for the period when you lived there.
It’s hard to explain how in writing, so feel free to call me.
Using your existing schedule, we could put a new one together for $200. (The added benefit would far outweigh this fee – I can roughly calculate this.)
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.au
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