I am planning to do a $5000 reno a new IP that will soon settle (include replacing the shower screen, curtains, carpets, vanity unit, toilet), is it possible to claim the depreciations for these fixtures considering I am going to remove it and replace it with new?
Cheers
johnWant to join financial independence before 31 years old, currently 25
You should be able to write off the old fittings and then claim depreciation on the new.
You should speak to a QS.
Email me if you would like a referral to the one I use.
Cheers,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
If you’re planning to do the renovations after settlement and before renting the place out, you won’t be able to claim the cost at all.
Wait till the property has been earning some income before you do anything. Right now, do the minimum required to get a tenant in there.
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.authanks everybody for your reply, I have got a few more questions:
1) if the old fittings is worth $4000, how much can i claim it as write off
2) if I don’t replace the exisitng fixtures, I will not be able to rent out the room individually, cos the existing tenant has not been taking good care of the property, therefore can it be regarded as repairs rather than capital works in the eyes of ATO?
Cheers
johnWant to join financial independence before 31 years old, currently 25
John,
In answer to your questions:
1) None.
2) Nope.
If you purchase a property and elect to do work to it before renting it out, you cannot claim the cost of that work.
It is not a ‘repair’ because you have not been renting the property out. If a property is damaged while you have been renting it out, then it becomes a repair.
It is also not allowable as a capital works deduction. Putting it simply, the ATO regard work done prior to renting out a property as a ‘cost of aquisition’. The value of that work is added to the cost of the property when you calculate your capital gain upon sale.
As I said earlier, do the minimum required to get a tenant in there for 6 months or so, even at a reduced rent.
Scott
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.au
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