Can anyone confirm pls, whether wrapper or wrappee can claim deductions for depreciation & expenses (eg paint,etc) regarding a wrap I.P.???
I would think if the wrappee has to pay all expenses,including rates,etc-that the wrappee would/should be entitled to claim.Thoughts??Hi Misty
Check with your lawyer/accountant but here’s what I’ve been told.
1. The wrapper is not entitled to the deductions because he/she is deemed to have disposed of the property. For tax purposes this disposal is usually regarded as having taken place on exchange of contracts.
2. The wrappee is not entitled to the deductions because for tax purposes he/she is deemed to be the owner of the property (contracts have been exchanged) and an indivdual cannot claim these deductions on their principal place of residence.However, on the plus side, you do get rid of land tax in NSW by wrapping a property. Similarly, the wrapper is deemed to have disposed of the property; therefore no land tax bill. And the wrappee is deemed to own the property but it is their PPOR so no land tax.
Hope this helps.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
So what happens then if the wrap property is used as investment prop (ie; rented out) by wrappee?
Would that then give the wrappee the rights to claim expenses & depreciation???
You must be logged in to reply to this topic. If you don't have an account, you can register here.
