Hi,
Are the purchasing costs of a investmet property that is not "serviceable" or in otherwords, cannot be tennanted in current condition still claimable on Tax? Also, if this was the case, could improvements/reovations to make the property serviceable be claimable?
Thanks in advance.
Ez
You need to clarify what you mean by purchasing costs.
Borrowing costs are claimed over five years. So total borrowing cost / 5 is claimed each year for five years.
http://www.ato.gov.au/individuals/content.asp?doc=/content/31258.htm
You can claim if the property is available to rent. So get a property manager to start marketing it as being available to rent after a certain date (due to upgrade) being when you think it will be ready to rent. (Tenants do not usually move in if it is not finished and will be able to move in straight away when you have finished it if it is marketed via property manager.Mortgage insurance is claimable see in web site links from ATO.
Legal Fees are not claimable for borrowing costs.
Stamp duty on the loan is claimable but not stamp duty on the whole property /land transfer !
http://www.ato.gov.au/individuals/content.asp?doc=/content/00113245.htm
http://www.ato.gov.au/individuals/content.asp?doc=/content/00113243.htmRenovations and improvements are claimable as depreciation against future rental income (divided over life of improvements)
employ a quantity surveyor to work out a depreciation schedule
when you finish improvements and rent it out. Keep receipts for quantity surveyor to use.If you do not rent it out and resell it the renovation / improvement costs can be added to capital cost base
however you can't claim both it's one way or the other way
(can't double dip expenses claim – against income and against capital gains cost base its one of these but not both)
Talk to your accountant for more specific advice.
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