Hi
I have been told that any finance and legal costs, including mortgage insurance, can be claimed as an expense against an IP. It is my understanding that anything under $100 can be claimed that year, and anything above this is to be written off over 5 years.
I had a property that I lived in for 6 months and is now being rented out. I am claiming all interest since becoming an IP rather than residence, but does anyone know if I am able to claim any of the legal/borrowing/finace costs originally incurred?
Thanks
Hi SJ
Your best bet it to speak with an accountant.
I think some costs (such as conveyancing fees) will be taken off the cost base when calculating CGT when you sell whilst others such as LMI are claimable over a 5 year period (or if the loan term is less than 5 years – it will be claimable over that period).
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
The legal costs are considered a capital item so these are not expenses. The borrowing costs are expensed over 5 years or the length of the loan whichever is the shortest. They are pro-rata each year. You will need to know the settlement date of the property and then the date when the property was available for rent. You will only be able to claim the borrowing costs from when the propery was available for rent. The other thing you may want to consider is obtaining a depreciation report. And don't forget to advise the council that it is now an investment property as some councils have different rates for PPOR and investment properties.
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auAs long as you know which company it was you can still claim. look up PPI templates and it will tell you how to claim even if you have no documents. Do not use a company, do it yourself.
Legal costs for the conveyancer are considered a Capital Item for CGT purposes however legal cost incurred for advice on the mortgage or loan documents are consider a borrowing expense.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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