Hi all,
I was just wondering if the fee for a property finder such as Househunters, etc is claimable as a tax deduction after purchace of an IP is made?
Kind regards,
Gatsby.It is a cost of doing busines so it is.
Did you know that property fees are not enforceable in some States as the person selling a property or dealing with it must be licensed. I have seen this happen in Queensland.
Robert Bou-Hamdan
Mortgage AdviserCheers Rob,
I’ll chase up whether the property finder is a licensed dealer or not.
Kind regards,
Gatsby.I have heard that these fees would not be claimable up front, but would form a part of the capital base (and only be deductible against CGT if the property is sold).
Terryw
Discover Home Loans
Mortgage Broker
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
Terry, if you obtained a receipt for this expense, why would it differ to paying for a building inspection or independent valuation?
Robert Bou-Hamdan
Mortgage AdviserI don’t know. But it is treated similar to legal fees. They are purchase costs.
It would be good if I am wrong as it would be much better to claim them up front. I guess it could come down to the wording of the tax invoice>
Terryw
Discover Home Loans
Mortgage Broker
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
Thanks for your reply Terry. As forming part of the capital base can they then be claimed as depreciation and if so at what rate?
Cheers,
Gatsby.I would doubt that you could depreciate buyer’s agents fees or even claim them over 5 years like loan expenses.
Any accountants out there?
Terryw
Discover Home Loans
Mortgage Broker
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
Buyers agents fees are a relatively new expense in relation to purchasing IP’s and have not been specifically mentioned by ATO. However I would see them as being non-deductible but able to be added to the cost base for CGT purposes also non-depreciable as they are not an asset. Reasoning would be that the expense in not necessarily incurred in producing income and also is an expense that takes place before the property produces income. Establishing expenses are seen to be capital in nature.
Also to note building inspections and independent valuations are also non deductible unless the valuation is for the bank to get the mortgage where it is then deductible over 5 years as a borrowing cost.Buyers agents fees are really the opposite of sellers agents fees also non-deductible but added to cost base.
Hope this helps
This info is general advice and should be discussed with your accountant in regards to your own circumstances.
Carlyle Cousins
Incentive Business Accountants
http://www.incentiveaccountants.com.au
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