Hi. I have a house in the Melbourne suburbs. I want to rent it out so I can move into the city, mainly for a change of lifestyle. This would involve me having to rent with some friends, which I am happy to do as this would improve my cashflow. The house needs some work, which I estimate to cost in the order of $50K. It is a 5 bedroom weatherboard. My question is: can I somehow claim the money to be spent as a tax deduction in light of the proposed use of the house as a rental? Do I have to move out such that it isn’t my principal place of residence? Any ideas would be appreciated. Darren
Unless the money is spent repairing wear and tear or damage as a result of tenancy money spent isn’t deductable.
So in a year or two you should be able to claim minor repairs.
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.69%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Ok. Thanks Simon. Hypothetical – What if a property is aquired, and is not a principal place of residence, but some work is required to get it into rentable condition. Are those funds then deductible?
Nope.
Only repairs to bring the property back to the condition it was in when it was first rented.
All is not lost though. Can claim it against CGT when you do sell – if CGT is payable.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.69%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks Simon.
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