All Topics / Legal & Accounting / Finance claims for IP

Viewing 5 posts - 1 through 5 (of 5 total)
  • Profile photo of sjgordon32sjgordon32
    Member
    @sjgordon32
    Join Date: 2011
    Post Count: 2
    July 16, 2011 - 4:51 am

    Hi

    I have been told that any finance and legal costs, including mortgage insurance, can be claimed as an expense against an IP.  It is my understanding that anything under $100 can be claimed that year, and anything above this is to be written off over 5 years.

    I had a property that I lived in for 6 months and is now being rented out. I am claiming all interest since becoming an IP rather than residence, but does anyone know if I am able to claim any of the legal/borrowing/finace costs originally incurred?

    Thanks

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    July 16, 2011 - 11:16 am

    Hi SJ

    Your best bet it to speak with an accountant.

    I think some costs (such as conveyancing fees) will be taken off the cost base when calculating CGT when you sell whilst others such as LMI are claimable over a 5 year period (or if the loan term is less than 5 years – it will be claimable over that period).

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of DAMPropertyDAMProperty
    Participant
    @damproperty
    Join Date: 2011
    Post Count: 44
    July 21, 2011 - 3:52 am

    The legal costs are considered a capital item so these are not expenses.  The borrowing costs are expensed over 5 years or the length of the loan whichever is the shortest.  They are pro-rata each year.  You will need to know the settlement date of the property and then the date when the property was available for rent.  You will only be able to claim the borrowing costs from when the propery was available for rent.  The other thing you may want to consider is obtaining a depreciation report.  And don't forget to advise the council that it is now an investment property as some councils have different rates for PPOR and investment properties. 

    DAMProperty | DAM Accounting Services
    https://www.damaccountingservices.com.au

    Profile photo of AlexisKirkAlexisKirk
    Participant
    @alexiskirk
    Join Date: 2012
    Post Count: 2
    May 30, 2012 - 5:07 pm

    As long as you know which company it was you can still claim. look up PPI templates and it will tell you how to claim even if you have no documents. Do not use a company, do it yourself.

    Contractor Money

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    May 31, 2012 - 6:25 am

    Legal costs for the conveyancer are considered a Capital Item for CGT purposes however legal cost incurred for advice on the mortgage or loan documents are consider a borrowing expense.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

Viewing 5 posts - 1 through 5 (of 5 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.