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Thanks for the discussion! Your article was really helpful!!
Thanks Tyron!
That does help, but it sways me more to a repair deduction than capital work, although my interpretation may be incorrect:
1.The work you do needs to relate to the wear and tear of the property whilst it was an income-producing asset for you. — Yes, as a result of use and deterioration, although the tenants have only been there for 2 years.. it probably would of been throughout the life of the property!
2.Repairs carried out when you initially buy a property are defined as "initial repairs" and cannot be claimed as an outright deduction. — Not an initial repair, but during the period the property has been producing income.
3.If you replace the whole item – it is not a repair. — I replaced only the exterior piping and not the inside..
4.If you improve the material when carrying out the work – it is considered a capital improvement, not a repair, and is to be depreciated. — Whilst I did replace the material from steel to copper, it isn't really considered an improvement: steel pipes were used in original construction of houses built post-war contemporary circa 1960s/1970s as they were cheaper than copper, these days all properties will use copper as a result of steel pipes generally erode. The replacement of material doesn't improve the use of the pipes in any way, it is just an industry standard now (the plumber made mention)…
I guess the intention is: If not for the fact it was broken and leaking, I would not have repaired it!
Correct me if I am wrong?
Thanks all!
No I dont own my parents property, I only own my first property where I lived in then started renting. and moved back to my parents.
I guess for tax purposes, I have one PPOR and that is the property that is currently being rented out!! So as long as I sell within the 6 years, or I move back in, then I am exempt from CGT?
I haven't spoken to an accountant yet, Im an accountant by trade but not a tax accountant ha ha!!!
