Hi Guys,
AS a few of you know, I’ve recently purchased a rental property – however before I can rent this property out I need to do a few renovations to it (mainly cosmetics).
After realising that any renovations I do to the property prior to renting it out can only be claimed as capital works tax I’ve been trying to think of ways to do the renos while a tenant is in the property. Well I thought of one plan though I just wanted to run it past you guys first:)
I have a friend which is willing to move into the property and rent it from me for a very low rent – allowing me to renovate the property while she lives there.
What I was thinking is that I sign her up on a monthly based tenancy agreement (privately – not through a PM) then once I’ve finished doing the renos she can stay on (paying a higher rent) or she can move out.
Would this then allow me to claim these renos as depreciable items or repairs?
Thanks for your help!
Wayne
Wayne Leech
*Below are links to my websites – any feedback, comments would be appreciated:)
http://www.landsearcher.com.au – List your land for FREE (Private sellers only)
http://www.homesearcher.com.au – List your property for FREE (Private sellers only)I posed a similiar question in the Accounting forum and the answer is capital works deduction.
May be different in your case though.I think ATO tend to closely scrutinise rent that is below market rent in some circumstances.
Check with your accountant.
Maybe you could simply rent her one room, which would be cheaper than market rent while you do renovations.[daisy]
lifexperience
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