I have had my first IP for 6 months now and I plan to do my tax myself. I just have a few questions that I hope the more experienced contributors to this forum may be able to assist with.
1. Prior to purchasing my IP I paid for 2 residex reports on other properties that I was interested in, however, did not purchase. Can I deduct the cost of these reports?
2. I paid for a building and pest inspection on a property I missed out on. Is this deductible?
3. What happens with the purchase costs such as Stamp duty, mortgage insurance and conveyancing? Are these deductible?
4. Prior to renting the property, I had a carpenter fix some window ledges, and an Electrician install new lights and power-point covers. The new items are included in my depreciation report, but can I claim the cost of labour?
Any help would be greatly appreciated.
Simon.
I have worked out the answer to 3 and 4 by doing some research. But am still stuck on 1 and 2.
Simon.
Hi Simon,
My view is that Q.1 would only be tax deductible if you were in the "business" of property development and bought and sold several properties.
Q.2 is a capital cost, (as is 3 & 4) and will be added to the cost base of the property when calculating capital gains tax if/when you sell the property.Further reading : http://www.propertydivas.com.au/3TaxMang/CapitalGains.aspx
Thanks Amanda
Mortgage insurance is a 'borrowing cost' so should be able to be claimed over 5 years.
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
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