Hi All,
Need some help here. Are finance costs related to a property purchase considered capital costs and part of the cost of the property? Does this include stamp duty, settlement fees and bank charges?
Your help is appreciated
HHi h
they are considered Capital costs.
regards westan
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I have been trying to research this topic through the forums as my 2004-2005 tax return will have implications on some projects coming up next year. I am still confused. In one discussion there was mention of “ACQUISITION COSTS” which are added to the cost base (stamp duty and legal fees) and “BORROWING COSTS” which can be ?depreciated or deducted immediately (loan est fees, mortgage stamp duty, mortgage insurance etc). Does anyone have the definitive lowdown on this tax mess?[blink]
H and Ysar,
Borrowing costs relate to stamp duty on your mortgage and fees associated with your loan, application fees etc. These are amortised over 5 years or the life of the loan (whichever is shorter). I believe borrowing costs <$100 can be immediately written off.
Stamp duty on your property is capitalied and added to your cost base for CGT when you sell.
Hope this helps
Rhys
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