We have moved out of PPOR and purchased new PPOR. We now want to make original PPOR into an IP. Some work like replacing carpets, changing light fittings and minor plumbing work and other repairs need to be done to make it suitable. How do we deal with these costs? If I take out a loan for the works (after they have been completed so I have a total dollar amount), is the interest on the loan tax deductable? I assume we can only claim depreciation on the works rather than an instant tax deduction. Am I right? The property will no be rented out until Februaury 2011.
Not sure how you would take a loan out for the work after it is finished – unless you are paying someone to do them???
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 am hoping to pay for tradesmen to do work out of my own money then get reimbursed by loan at the end.
I would think that the interest on that would be deductible. Not sure about doing repairs before the place is available for rent, but you should be able to depreciate things once the place is listed for rent. Maybe list early at a high price and then when you are ready drop it.
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 would assume I would have to wait unti it was available for rent before I could start claiming a deduction for interest. I am OK with that as it is not a huge amount. I wil also get a depreciation schedule done then.
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