Repairs done just after acquisition are treated as Capital Works.
But how about the travel expenses incurred for DIY renovations ? E.g. travelling from home to the IP to do the renovations.
Can such costs be deducted immediately under travel expenses ? Or do they need to be included as part of the Capital Works costs for depreciation ?
hmm … Can someone please help ?
My completely un-educated and wild stab in the dark answer is:
Travel is travel, use whichever one of the five travel deduction methods suits and claim it as a deduction from your income.
Unless you really wanted to claim it as capital expenditure (i don’t know why you would), then you could probably argue it in there that way.
I’m no expert, just having a stab!![devilish]
lifexperience
go to the ato web page.
everytime i have a question thats where i start.
http://www.ato.gov.au
look for property investing claims
i am hesitant to ring the ato directly as i never get the same answer twice!
cheers
shaunLead, Follow or get out of the bloody way
Woot ! … I think I can claim all the travel used for initial repairs ! … here’s the ruling … http://law.ato.gov.au/atolaw/view.htm?locid='AID/AID2003772‘
My understanding is that you cannot claim it as an expense and claim it against your taxable income.
However you can include it in your cost base ie. deduct it against the profit you make when you sell the property. Its capital in nature.
I agree with Yack on this one. The travel to renovate or repair a property which isn’t producing an income is calculated as your cost base for CGT when the property is sold.
There was a recent newspaper article about the top 10 incorrect claims made by property investors. This was one of them.
If the property was available and advertised for rent, or rented at the time, then this would change things.
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