Q: Can I write-off the stamp duty on transferring the title on purchasing a rental property as borrowing costs?
A: NO! The costs associated with the transfer of title are “acquisition†costs that are payable regardless of whether or not money was borrowed to fund the purchase. Stamp duty on title transfer forms part of the cost base for Capital Gains Tax purposes.
HI Amanda
just in relation to stamp duty on the transfer – perhaps it should state this relates only to freehold property. I would argue you should be able write off stamp duty that relates to leasehold property – as you can claim lease costs as a deduction – I believe this can be claimed in the ACT where all property is leasehold.Originally posted by raddles:Q: Can I write-off the stamp duty on transferring the title on purchasing a rental property as borrowing costs?
A: NO! The costs associated with the transfer of title are “acquisition†costs that are payable regardless of whether or not money was borrowed to fund the purchase. Stamp duty on title transfer forms part of the cost base for Capital Gains Tax purposes.
HI Amanda
just in relation to stamp duty on the transfer – perhaps it should state this relates only to freehold property. I would argue you should be able write off stamp duty that relates to leasehold property – as you can claim lease costs as a deduction – I believe this can be claimed in the ACT where all property is leasehold.We are not talking about writing off the stamp duty. Some of us are having trouble letting go of that one.
We are talking about claiming the interest incurred in borrowing the stamp duty. Two totally separate things!!
Simon Macks
Residential and Commercial 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.
http://www.resortpublishing.com.au/Resort_News/index.php?Section=133&Article=479
thanks Simon – should have got back onto the topic but found the above link – it seems to refute the argument that you are limited to claim only the purchase value of the home
http://www.resortpublishing.com.au/Resort_News/index.php?Section=133&Article=479
thanks Simon – should have got back onto the topic but found the above link – it seems to refute the argument that you are limited to claim only the purchase value of the home
So Amanda do you believe that the interest paid on the 105% borrowed is tax deductible?The 5% covers all legals, stamp duties, inspections etc.
Thanks,
Simon Macks
Yes Simon, as I stated above my opinion is that all the interest on the borrowings, to the extent that it has been applied for the purpose of acquiring an income producing asset, would be deductible. What I mean here is you must use all the borrowed money to pay for costs in acquiring the property so any borrowed money used to payout existing credit card debts or a flash boat will need to be apportioned.
The total cost of the asset includes all those items that form part of the cost base such as the purchase price of property, Stamp Duty on transfer of the property, Legal fees and any capital improvements to property.
So “Thinker” you may like to consider ringing the Accountant back to make sure you’re both talking about the same issue. As you can see from the posts here, it is quite a complex issue and easily confused. If you’re still not happy with your Accountants advice then perhaps consider speaking to a more senior Accountant or look elswhere.
AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”
Really, its not that difficult a concept.
Interest on money borrowed for investment purposes is deductible!
Simple really.
Terryw
Discover Home Loans
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Send an email to get my newsletter.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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