Hi all,
could someone tell me if you can still claim against tax for the cost of building & pest inspections, when the pest inspection fails to show the investment property is pest free, ( major damage ), and you no longer want to go through with the purchase.
Can you still claim these pre purchase expenses?Thanks,
Frosty.I hazard a guess – if you have another property receiving rent as income you definitely could as it's part of yoru property investment activities.
Anyone knows otherwise?
frosty 1
I think the answer is NO.
You are trying to claim against a property you do not own, the only way I think you could claim it is if you were a full time investor ( or most of your money came from investing not working ) then you would be classed as an investor for tax ( probably what j900 was hinting at ).I would relate it to the argument such as you cannot claim for training courses say for a plumber if you are currently employed as an electrician.
Happy to be proven wrong.
Could someone kindly confirm for me – it is definitely my responsibility to pay for the building and the termite inspections on my investment property isn't it? This is my first one and I just want to check I'm not being silly and paying for something the vendor has to do as I've made the two inspections a condition of the contract to buy.
My understanding is – it's my responsibility to pay, the vendor should fix anything the building inspection etc finds or if she/he doesn't then either the price is negotiable or I decide whether to go through with sale or not and finally the upside is that as an investment property the fees for these insepctions are tax deductible if the sale goes through.Be grateful for verification.
many thanksKaty,
Yes. There has been rummers of it being the sellers responsibiliy some time in the future.
The sellers doesn't need to fix a problem, as you say, its then up for negotiation on price if you find a problem or they just say " too bad take it or leave it" and you walk away, but have to pay the solicitor and inspection fees. No tax claim sorry. It's not fair, but that's why you take a chance when you try to buy a house in Australia.
If you buy then you can claim the costs of inspections, but its costs of purchase – so you cannot claim it until you sell the house and claim it as initial buying cost for CGT purposes. So don't expect to see your money soon..Good Luck
My thinking was that building/pest inspections were not tax deductible whether you end up purchasing the property or not, WJ Hooker are you saying you are able to claim inspection costs in you purchase the IP??
cmason,
If you buy a house for $300,000
You pay stamp duty say $15,000
You pay solicitor fee say $1000
You pay inspection fees for structure and pest say $500You cannot claim the cost of above on tax, but you can claim total $316500 as your cost base for CGT when you sell.
But if you do 2 1/2% depreciation on building cost over 10years say $15,000, then your cost base is reduced when you sell down to $301500.
How's that!
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