Hi All,could someone explain the difference between items you can depreciate and renovation costs which are deemed a capital improvement. eg. if I put in a new carpet to replace an existing carpet, this item can be depreciated. But if I put in new polished floor boards, this is deemed capital improvement. What is the difference. Is this explained on the ATO web site.[blush2]
thanks
HelenI think if you do something that makes the item ‘better’ than it was originally, or changes its original character, than it would be deemed an imporvement. replacing damaged carpet would be a repair if a similar carpet used, but if you use a nicer more expensive carpet, than it may be an improvement.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Helen,
The ATO website Rental Guide 03/04 does have a guide which explains depreciable items on page 20. There is also some clarification of repairs V improvements on page 9 and again on page 18.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
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