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Home / Forums / Property Investing / Help Needed! / Cut Down Tree…Tax Deduction??

  • Avatar of bigbenbigben
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    @bigben
    Post count: 62

    Hi All,
    I have question regarding tax for an IP that i have.
    I was wondering if i was to cut down a tree that is extremely clost to my property and is causing damage to the guttering ie Leaves clogging,branches falling etc. can i claim removal of said tree as a tax deduction as it will be costly as i believe that a crane will be required to ensure that tree does not fall on house.
    Any advise would be appreciated or even a link to where i may find info on this question.

    Sooner or later the man who wins is the man who thinks he can

    Avatar of yackyack
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    @yack
    Post count: 1,206

    I see no reason why not. You are maintaining your property.

    Avatar of bigbenbigben
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    @bigben
    Post count: 62

    Yes that is what i thought however others have said not as it is not affectingthe rental income however i have been on the ATO website and i have to agree with you that it is basically maintenance and upkeep!
    Thanks

    Sooner or later the man who wins is the man who thinks he can

    Avatar of redwingredwing
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    @redwing
    Post count: 2,733

    Even if the tree is not on your property?

    Maybe find out who owns the tree..

    REDWING

    “Money is a currency, like electricity and it requires momentum to make it Effective”
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    Avatar of Duane FitmanDuane Fitman
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    @Duane-(Fitman)
    Post count: 1

    Hi BigBen,
    In short, yes it is a legitimate deduction…think of the burden to the ATO if the tree does fall on your IP. Hmm? Lost income & huge repair bill. Now we wouldn’t want that for the ATO to deal with now would we?.
    Cheers.[blush2]
    Actually if it is a danger to the tennants then remove it quicksmart.

    Avatar of Mortgage HunterMortgage Hunter
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    @Mortgage-Hunter
    Post count: 3,781

    Seems that much of the above advice is opinion. You are the one that takes responsibility for your tax return – not well meaning strangers [biggrin]

    I suggest you contact the ATO or an accountant and check that it is not of a capital nature.

    Would be great if you could let us know.

    All the best,

    Simon Macks
    Mortgage Broker
    http://www.mortgagehunter.com.au
    0425 228 985

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    ***3 year fixed – 6.49%***

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Avatar of Mortgage HunterMortgage Hunter
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    @Mortgage-Hunter
    Post count: 3,781
    Quote:
    Originally posted by redwing:

    Even if the tree is not on your property?

    Think he meant near his building instead of property – is this correct?

    Otherwise if it is not on your property you may well be breaking a law by removing it yourself.

    Cheers,

    Simon Macks
    Mortgage Broker
    http://www.mortgagehunter.com.au
    0425 228 985

    Todays Hot Rate
    ***3 year fixed – 6.49%***

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Avatar of bigbenbigben
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    @bigben
    Post count: 62

    Hi Again,
    Thanks for the thoughts.
    Let me clarify: The tree is probably on the boundary of the 2 properties and mostly on my side of the boundary as the base of the tree is around 1m diameter.
    its between a pair of gunbarrel houses that only have about 2 m between then as is so you could imagine the saga that will evolve when we are to remove it!
    I am awaiting a reply from my accountant regarding it deductability however i am pushing for the opinion of calling it yard maintenance and not landscaping( which is not deductable).
    I dont believe that it is not a danger to tenants as the tree is healthy however a large tree can only fit in a small space for so long before i say goodnight to my gutters.
    I understand that the other property owner may also have rights to this tree and will probably want to remove it as it must be filling his gutters also however i probably need to get a survey done to see who ownes the majority of the tree as if it is on his side and he says that he wants to keep it then [cigar][cigar]this is what i will look like.
    Thanks again

    Sooner or later the man who wins is the man who thinks he can

    Avatar of bigbenbigben
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    @bigben
    Post count: 62

    Well i have finally put this baby to bed….I hope

    I have spoken to the ATO and was only on hold for about 20mins while switch operators got there supervisors , who then got there supervisors and so on ….oh well in the end they said that it is deductable as it is classified as maintenance and the only thing that wouldn’t be deductable was if i was to put a garden bed where the tree was as that is landscaping!
    Hope this helps others
    Still dont know what to do if its not actually mostly on my block[angry2]

    Sooner or later the man who wins is the man who thinks he can

    Avatar of calvin_thirty4calvin_thirty4
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    @calvin_thirty4
    Post count: 556

    BigBen,
    even if the tree isn’t mostly on your side, don’t you have the legal right to cut off anything protruding over the boundary onto your side!?! Perhaps you should check with your local Shire/Town/Council on their regulations.
    Have you spoken to the neighbour? He/she might be of the same oppinion as yourself. You could combine your efforts……

    Cheers

    C@34

    Avatar of CalderCalder
    Member
    @Calder
    Post count: 44

    Bigben
    In certain suburbs in Melb, a tree that size would definintely need council approval to remove. Information like this can often be obtained from council websites relatively easily. Talk to you neighbour before going much futher. They may LOVE the tree and you could be wasting your time if it not dangerous.

    Avatar of TerrywTerryw
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    @Terryw
    Post count: 14,560

    Bigben

    Watch out when ringing the ATO. If you ring back and ask the same question 3 times, you may get 3 different answers!

    Terryw
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    Terryw | The Loan Experts Pty Ltd | FinLaw Pty Ltd
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    Law, Loans and Tax

    Avatar of redwingredwing
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    @redwing
    Post count: 2,733

    Only 20 mins..WOW

    REDWING

    “Money is a currency, like electricity and it requires momentum to make it Effective”
    Count The Currency With This Online Positive Cashflow Calculator

    Avatar of DerekDerek
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    @Derek
    Post count: 3,544
    Originally posted by bigben:

    The tree is probably on the boundary of the 2 properties and mostly on my side of the boundary as the base of the tree is around 1m diameter.
    its between a pair of gunbarrel houses that only have about 2 m between

    Methinks you are best (if able to) removing the tree now anyway. A small spot like that for a growing tree means big problems in a few years time – says he with visual picture of cracking foundations, cracking brickwork, rusted gutters and so on.

    Derek
    derekjones1@bigpond.com

    Property Investment Support Available. Ongoing and never stopping. PM welcome.

    Avatar of alvinmalvinm
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    @alvinm
    Post count: 6
    bigben posted

    if i was to put a garden bed where the tree was as that is landscaping!

    Does this mean landscaping to increase value of the house is not tax deductable? In general does that mean any improvement to the house (if not considered maintenance is not tax deductable?

    Alvin

    Avatar of DerekDerek
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    @Derek
    Post count: 3,544
    Originally posted by alvinmercado:

    Does this mean landscaping to increase value of the house is not tax deductable? In general does that mean any improvement to the house (if not considered maintenance is not tax deductable?

    Hi Alvin,

    Improvements are not tax deductible rather they can be used to offset any future CG liabilities.

    Do not forget that considered improvements do/should help to maintain a property’s value and/or rent return and/or general state of well being.

    Derek
    derekjones1@bigpond.com

    Property Investment Support Available. Ongoing and never stopping. PM welcome.

    Avatar of JuliaJulia
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    @Julia
    Post count: 217

    BigBen,
    Tree removal is claimable if the tress have become diseased or infested during the time of ownership. Removal is also claimable if the tree is causing damage such as roots interfering with pipes and the damage was not present when you purchased the property. If a tree is removed because it may cause damage in the future or you are fed up with the leaf litter that has always happened since you bought the property, then you are making an improvement which is not deductible.
    Improvements that are still present when the property is sold can increase your cost base for CGT purposes.

    Julia Hartman
    julia@bantacs.com.au
    http://www.bantacs.com.au

    Avatar of alvinmalvinm
    Member
    @alvinm
    Post count: 6
    Originally posted by Derek
    Do not forget that considered improvements do/should help to maintain a property’s value and/or rent return and/or general state of well being.

    Thanks for the information…

    Now correct me if I am wrong, say CG is the capital gain, PCost is the original purchase cost, ICost is the improvement cost, SCost is the selling cost of the property and OCost is the other expense cost… is it then

    CG = SCost – (PCost + ICost + OCost)

    My point is, I am trying to reduce the CGT to be paid to ATO…

    Alvin

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