Hi All,
OK here is my scenario.
Purchase is in Victoria.
Contract of sale (offer) was signed off on 1st April 2012 conditional on building inspection and finance approval.
Building inspection has now been done. Finance should be formally approved by Monday 16th April.
Contract of sale will then be unconditional from 16th April 2012. Deposit is being financed from the bank as well (Please dont start on me about 100% borrowing – this isnt the questions I am asking about!)
Loan through the bank will be recognised as an investment loan from day one.
So the deposit will be paid (and interest start to be paid probably by end of the month at the latest)
Settlement is not occurring until 20th July 2012. Once the contract becomes unconditional I intend (through the same agent selling me the house) to start advertising for a tenant so we can have a tenant from day one.
CGT Acquisition Date – Is it 1st April or 16th April when it becomes unconditional? (or have i got it wrong and acquisition date is date of settlement?)
Now the interest payments on the deposit can be claimed this financial year – (I think this one is right but correct me if I am wrong).
Borrowing expenses assuming they are charged now can start to be claimed from this financial year right? (over 5 years)
The one I am not sure about can I and should I get a depreciation schedule done now to claim depreciation this financial year? Or do I actually have to wait till after settlement occurs and start depreciation from next financial year?
My thinking is that if it is considered a CGT Acquisition at contract sign date then depreciation can start to be claimed this financial year?
CGT acquisition date is the contract date, so 1st April.
Interest on the deposit is claimable when the interest is paid, so you may have one month's deduction this financial year.
Borrowing expenses on the main loan won't be charged until the loan is drawn, at settlement, so claimable from settlement date.
"My thinking is that if it is considered a CGT Acquisition at contract sign date then depreciation can start to be claimed this financial year?"
No, as depreciation is deductible when the asset first becomes available for use. It isn't your asset until a) you have paid for it, and b) it is available for a tenant to use. The earliest date for depreciation would therefore be settlement date.
Dan42 wrote:
No, as depreciation is deductible when the asset first becomes available for use. It isn't your asset until a) you have paid for it, and b) it is available for a tenant to use. The earliest date for depreciation would therefore be settlement date.Is it worthwhile getting a depreciation schedule done up before settlement? Or wait till after settlement? I would not have a problem getting a surveyor access to the property. I am thinking with very little deductions this financial year might be worth getting a couple of costs through this financial year.
jadamo76 wrote:Is it worthwhile getting a depreciation schedule done up before settlement? Or wait till after settlement? I would not have a problem getting a surveyor access to the property. I am thinking with very little deductions this financial year might be worth getting a couple of costs through this financial year.If you can get access tothe property, then it's probably worth it. You would be able to claim the cost of the report.
Hi
As you are not settling until July…..you won’t be able to claim anything this financial year.
The report will start from Settlement.
Might be best to organise the QS to inspect just prior to settlement – so as to not disturb the tenants if you have one immediately.
regards
Tyron Hyde
CEO
http://www.washingtonbrown.com.auwashingtonbrown wrote:HiAs you are not settling until July…..you won’t be able to claim anything this financial year.
The report will start from Settlement.
Might be best to organise the QS to inspect just prior to settlement – so as to not disturb the tenants if you have one immediately.
regards
Tyron Hyde
CEO
http://www.washingtonbrown.com.auHi All seems we had a development and now settlement will occur on 29 June.
Can we claim the cost of the report this financial year but then start the depreciation next financial year? Or would there be a very ridiculous pro-rata required to cover the 29th-30th June?Cheers,
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