I have a question to ask that seems to be getting mixed responses.
I am building two homes that are to be sold off or rented out – income producing. I am wondering however if i can claim any of the costs of the propertys (interest payments, rates, etc etc) even if they havent generated any income as yet?
Some people say that if the clear intention of the properties is for them to be income generating then the costs are still tax deductible, while other people say that until it has generated income, that I cannnot claim any deductions.
What do people think?
At present you have no clear intention – is it to sell them off or is it to hold and rent?
Is it structured as a business or sole trader/partnership?
Are you claiming gst input credits, using the margin scheme etc.
Until you can prove that this is 'stock in trade' then you can't claim the interest costs, likewise you may have to capitalise your interest if you decide to hold.
Hi
Obviously the intent isn't clear as you haven't decided – doesn't matter anyway unless you are in the business of property developing. If the property is to be a rental – can't claim any interest or rates until the property is completed available for rent, anything before this date is capitalised to the cost of the property.
Hope it goes/went well.
Yes, if you are intending to rent them out you can claim the usual expenses such as rates, insurance, interest etc.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I was informed during our build to sell that I was only able to claim deductions against the sale of the building (not including GST which can be claimed along the way). We offset all interest, rates, insurances etc against sales price to determine our tax payable.
mickI was informed during our build to sell that I was only able to claim deductions against the sale of the building (not including GST which can be claimed along the way). We offset all interest, rates, insurances etc against sales price to determine our tax payable.
mickHave a look at the latest http://www.bantacs.com.au newsletter – which has something on this – and check out their other pdf documents.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You must be logged in to reply to this topic. If you don't have an account, you can register here.
