Hi all,
We have a home/IP which is costing us approx. $10,000 pa. We use as holiday home at present (not rented out).
It has been decked out with furniture etc.
Initially when purchased were going to rent out and contacted a well known company regarding depreciation schedule, this company advised that even if NOT rented out can still claim depreciation as long as you can prove that you have attempted to rent out property, ie producing copies of adverts etc.I would dearly love to reduce the $10,000 liability pa but this does not sound correct.
Can anyone out there clarify this? or suggest any alternatives to obtaining some sought of reduction…. Cheers.
PS
Hope you are all watching the Wedding tonight. Yeah, I know food for morans, but I am a sucker…Hi Marisa,
That is correct. You are allowed to claim all costs associated with a property for the period that is was rented or available for rent.
As indicated copies of advertisements, property management contracts, phone call and postage records could all be useful if you were audited by the ATO.
If you happen to holiday in that property for one month of the year your total claims would be reduced by one twelfth, Ie. the period it wasn’t available for rent.
As an aside have you considered permanently renting out the property and using the $10K, or part thereof, on an annual holiday elsewhere. It may be ‘cheaper’ in the long run.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Marisa,
Derek is right, in the event of an audit you would need plenty of evidence to support any assertion that the proerty was available for rent and available at a market rate. I’d say the ATO would find it hard to swallow the fact that you had no luck at all renting it out. You need to imagine yourself sitting across the desk from an embittered public servant and trying to explain why nobody ever wanted to stay in your furnished holiday house despite your best efforts at renting it out. Be careful.
ScottDerek and Scott
Many thanks for advice. Looks like it will remain a holiday home for now anyway.Rob,
Thanks for your reply.
$10,000 covers all expenses the loan, rates, maintenance etc. on property. Loan is approx. $120,000, however this changes all the time as it is an equity line and we try to reduce loan whenever possible and property was last valued at $350,000.Given the ATO will be looking very closely at property investors this year that may be wise Marisa.
depreciator, thanks for reply, not worth ending up in hot water. Cheers[blink]
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