All Topics / Legal & Accounting / Depreciation Schedule for a PPOR to turn into an IP later

Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of miikemiike
    Participant
    @miike
    Join Date: 2008
    Post Count: 111
    August 11, 2011 - 6:00 am

    Hi Everyone,

    I’m investigating having a depreciation schedule done.

    Since I purchased my PPOR (2 bedroom flat) in 2008 I’ve had renovations done to it and a cosmetic makeover, including:
    – Removal of wall for open plan,
    – New kitchen and appliances,
    – Painting of walls,
    – Handles and Locks,
    – Etc..

    As I am still living in the property thus the PPOR I would like to know if it is recommended to have a depreciation schedule done. Will I gain any benefit; and is it tax deductible in my situation.

    I intend to turn this property into an IP in the next 6-24 months.

    Appreciate any assistance.

    Miike

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    August 11, 2011 - 7:21 am

    Hi Miike

    Best to wait until it turns into an IP as you can't depreciate whilst it's a PPOR.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    August 11, 2011 - 8:45 am

    I was just going to write the same thing. No benefit now, so you might as well wait. You may find you fix or improve things before moving out and would want these included in any report.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Rob G.Rob G.
    Participant
    @rob-g.
    Join Date: 2010
    Post Count: 70
    August 11, 2011 - 10:30 am

    If the PPOR is rented for the first time, you would likely need to get a market valuation of the PPOR for CGT purposes anyway. You could get all your schedules done at that date for convenience.

    Cheers,

    Rob

    Profile photo of miikemiike
    Participant
    @miike
    Join Date: 2008
    Post Count: 111
    August 11, 2011 - 11:37 pm

    Thanks for the quick replies everyone.

    If I was to have rent out one of my rooms and as it is a 2 bedder I believe I would be able to claim some sort of percentage or the like as an IP.

    If this is the case, would a depreciation schedule then be viable due to the room seen as an IP?

    Thanks everyone, really appreciate the quick responses!

    Miike

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    August 11, 2011 - 11:47 pm

    Miike

    You can do that and depreciate assets in proportion. But beware as you will lose the CGT exemption on the house. Which may cost you must more than you will save in the short term.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of miikemiike
    Participant
    @miike
    Join Date: 2008
    Post Count: 111
    August 11, 2011 - 11:48 pm

    Thanks Terryw,

    Yeah, that would not be a great scenario.

    I’ll just have to wait until I turn it over to an IP.

    Thanks for the help everyone!

    Cheers,
    Miike

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