Tax question

[BOMI]

I have a new house, as some of you know :D

It will be a rental as of June this year.

I wanna do some stuff to it, AC amongst other things.

Is this tax deductable if I do it now or only after it becomes a rental?

Sorry if this is a silly question but I have NFI about tax and houses etc.


Cheers,

Troy :cheers:

[bok1]

pretty sure only when it becomes a rental from that time you signed a rental contract with the real estate and or with the tenant.


phil

[hsvredsled]

See Below....and thanks for the Nickname change!!!!

[hsvredsled]

I'm pretty sure Phil is right, but with Nick on here, all your questions would be answered.

If the unit was installed prior to the rental, a shonky person would obtain a receipt from 'another person' dated after June with the installation date also dated after June.

This of course is highly improper..........:horse:

I think there is also an issue with repairs vs improvements??

Chime in anytime Nick.

[NickS]

Doesn't matter when it's installed mate, you will be able to depreciate the A/C over it's useful life from the time the property starts to earn income ... you can't write it off in one hit though.

If the things you're doing before it's rented are capital in nature, i.e. improvements and not repairs (A/c install ... build in wardrobes ... dishwasher etc.) you can claim depreciation. If it's something broken that needs fixing (dripping taps ... busted light fitting etc.) then it's a repair while the house is your residence and it's not tax deductible.

Also keep in mind that you can maintain the principal residence CGT exemption for up to six years from the date you start renting it out as long as you haven't purchased something else that you want to live in and claim the exemption on. At the end of the six years you either need to move back in, sell it or have it valued and any future capital gain will be taxable.

Also ... how old is the property ? There can be significant depreciation claims if it's fairly new. It can be worthwhile getting a quantity surveyor to do a depreciation schedule for you. It costs $400 or $500 (tax deductible) but can save you thousands in tax.

There's heaps of stuff with rental properties mate ... happy to help, you know how to find me.

:cheers:

[Kyle]

If you want to claim the a/c we won't be able to do a 'cashie' either :)

[BOMI]

Doesn't matter when it's installed mate, you will be able to depreciate the A/C over it's useful life from the time the property starts to earn income ... you can't write it off in one hit though.

If the things you're doing before it's rented are capital in nature, i.e. improvements and not repairs (A/c install ... build in wardrobes ... dishwasher etc.) you can claim depreciation. If it's something broken that needs fixing (dripping taps ... busted light fitting etc.) then it's a repair while the house is your residence and it's not tax deductible.

Also keep in mind that you can maintain the principal residence CGT exemption for up to six years from the date you start renting it out as long as you haven't purchased something else that you want to live in and claim the exemption on. At the end of the six years you either need to move back in, sell it or have it valued and any future capital gain will be taxable.

Also ... how old is the property ? There can be significant depreciation claims if it's fairly new. It can be worthwhile getting a quantity surveyor to do a depreciation schedule for you. It costs $400 or $500 (tax deductible) but can save you thousands in tax.

There's heaps of stuff with rental properties mate ... happy to help, you know how to find me.

:cheers:

Hey all, thanks for th e replies, I was thinking about getting a QSR done, a mate here said exactley what you said, costs a bit but is very worth while, the house is brand spanking Nick, youll me getting a house warming invite sometime in March mate.

Troy :)

[BOMI]

Hey Nick do you know a good quantity surveyor?



Troy :)

[NickS]

Hey Nick do you know a good quantity surveyor?



Troy :)

We have really only ever used firms mate, here's a few that have been around for a while;

http://www.bmtqs.com.au/

http://www.washingtonbrown.com.au/

http://www.deppro.com/

:cheers:

[cosmo vyss]

Bomi, I have Deppro before and they were pretty good. I think they charge around 600 off memory. Its worthwhile doing no matter who you use.

[BOMI]

Thanks for that Nick and Cosmo :cheers:



Troy :)