Hi,
I am going to buy a 2nd IP, it is 4X2 property. I need to spend @20K before I move in or rent it out. I live in 3 X 1, my family need more rooms. I have lived in my priniciple place of residence for 18 months. I bought it for $415K and market value is $540K now.
Can anybody advise me whether I can move in IP and do renovation or I should renovated first and move in or I can not do it except renting it out?
Is there any post related to my question?
Actually my plan is to buy IP now and move in during Christmas holidays. Currently it is rented by students and they want to stay till Christmas.
Thanks a Lot.vsdabhi wrote:Hi,Can anybody advise me whether I can move in IP and do renovation?
and doing renovationWhat is stopping you from moving in and doing renovation?
I think what you might be asking is what is the tax deductible stance.
It most likely will be classified as an improvement as you purchased the IP in the current state it is in and you are improving the place beyond the state you purchased it in.
If you paint the whole house this is an improvement. "It is a grey are of tax law"
If you replace the whole item in its entire amount like floor coverings it is an improvement.
If it is an improvement you can depreciate it and should get a quantity surveyor to work out a depreciation schedule.
You may wish to ask your accountant if the renovations are an improvement and depreciable rather than one off expense claims.
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