Hey Guys,
I own a 2 br unit that I am currently living in and hoping to convert to IP in the next 6 months or so. It needs a few minor repairs done before I rent it out, including a new blind on one window and a new ceramic soap dish in the shower to name a couple. They’re obviously not urgent and I can live without them, but I’d like to have the place as it should be before a tenant moves in.If I list the property for lease with an agent on a Monday say, can I come in on the Tuesday and make the repairs for them to be tax deductible expenses or does the property actually have to have a tenant?
Thanks heaps.
Age doesn’t negate effort – you can never be too young or too old.
Neither.
A repair is classed as bringing a property back to the condition it was in when first rented out by the current owner.
So you are not repairing anything.
If you did these things after it has been tenanted for a reasonable time then they might be deductible. But only if caused by wear and tear due to the tenant.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Ah ha!
Thanks for that, just wasn’t sure whether it was worth holding off, or if it wouldn’t matter if I fixed up the few odds and ends now.As for another idea of mine, what are the tax implications for significant cosmetic improvements? Currently, all the walls are exposed brick and I think a significant amount of value could be added if this was changed with some plasterboard. If I did this betweeen tenants, say, in 12 months time, could it be deductible, or am I better off starting the job ASAP before any price increases in materials?
Thanks again!!! This site rocks!
Age doesn’t negate effort – you can never be too young or too old.
Originally posted by Spanky:Ah ha!
Thanks for that, just wasn’t sure whether it was worth holding off, or if it wouldn’t matter if I fixed up the few odds and ends now.As for another idea of mine, what are the tax implications for significant cosmetic improvements? Currently, all the walls are exposed brick and I think a significant amount of value could be added if this was changed with some plasterboard. If I did this betweeen tenants, say, in 12 months time, could it be deductible, or am I better off starting the job ASAP before any price increases in materials?
Thanks again!!! This site rocks!
Age doesn’t negate effort – you can never be too young or too old.
Nope. Sounds like a capital improvement not a repair. Remember a repair brings it back to the condition it was when first purchased/rented.
So this is capital in nature. But all is not lost.
You can use the cost to offset any capital gain you make when selling. In addition you should be able to depreciate this cost each year.
but the question is: “will this work get more rent?” If not then dont do it. If it adds value then do it only when you need to access that value – ie when selling or when getting it valued for a loan.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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