Hi,
I have investment Property which I have been unable to rent/lease yet this financial year as I have been arranging finance and negotiating with builders for renovations on the property to bring it to a state where I can lease it out again.
Its currently being renovated.
It should be available for rent by the end of this financial year so might get 1 months or more rent/income in as the builder is about 70% done with reno.
Can I still claim all expense incurred for the property this year as I intended to rent it. I had it lease in ’13 Financial Year.
Thanks
You should check with an actual accountant rather than ask online.
I’m not an accountant, but my belief would be that:
– If they are actually renovations, in that you are replacing existing fixtures with new ones, and/or creating something new, then this is depreciated over the life of the fixture. This is done in a depreciation schedule. This is stuff like, new carpet, new cupboards etc.
– If you are doing repairs, like fix a faulty oven (but you still use the same oven) or paint the walls, then this is recoverable in the 1 year.
Do a search of repair versus renovation, it’s probably on the ATO website. Also, if you haven’t got a depreciation schedule then you should consider getting on of those as well. Ideally you would find out the answer before you renovate, not after…
Also, whatever you ripped out could be depreciated to zero if you replaced it.
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This reply was modified 10 years ago by
TheNewGuy.
Thanks. But that’s not what I was asking.
Just want to know if I can negative gear as I might not receive rental income this financial year
Also not an accountant but if the property is an IP (even if it’s being renovated temporarily) then I would have thought you could still claim interest.
Agree with newguy about the improvements vs repairs issue. These sound like improvements.
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]
Talk to you accountant straight away…
I think you can’t claim a deduction eg negative gearing if you have not received an income on the property.
you may claim some when it was being rented out at that Time.
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
I don’t think these expenses will be deductibe against income as the property wasn’t available for rent. They may be capital expenses and could be used to reduce CGT in the future so keep good records.
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
Hi,
Sorry, I thought you meant you had leased it earlier in the FY based on the comment ‘I had it leased in ’13 Financial Year’. So, do you mean you had it leased in 12/13 FY, and not 13/14 FY?
The question seems to simply be, can you claim any expense, including interest repayments if you never generated rent? That’s definitely in the realm of an accountant, however, it sounds ‘ok’ in that you are incurring expenses in ‘gaining or producing assessable income’.
I would be interested to know the answer, so if no one else responds, then let us know how you go.
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This reply was modified 10 years ago by
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