Acquisition costs

Hi @Terry_w,

Not sure if the topic has been discussed before. Would you be able to let me know what can be included in an acquisition costs of the property?
Building and pest fee
Solicitor fee
Council rate/ water rate at the time of purchase and the travelling costs to search for the property
Are they all part of the acquisition costs?

Thanks.
Serah

 

Building and Pest
Solicitor for conveyancing
these are acquisition costs and not deductible against income

Council/water rates are deductible

Travelling to see a property you don't yet own is not deductible at all.

 

Travelling to buy a property is considered a preliminary expense and is not deductible and not a CGT cost. Travel to sell a property may also be capital expenditure rather than relating to earning assessable income.

However a buyers agent cost is a CGT cost as is a P&B for a property you do purchase. If it falls through the cost is not deductible or a CGT cost.

Bizarre tax issues.

 

Actually it all makes sense - if there is no property there is no income so any expense couldn't be deductible!

 

Thanks @Terry_w and @Paul@PFI .

Is the fee for depreciation schedule deductible from income tax?

 

yes it is deductible. claimed at Item D10 - Cost of Managing Tax Affairs

 

yes

 

Another question is should i use my credit card to pay for these kind of expenses and then use fund from the split offset account to reimburse my credit card?

 

If you do that all you do is increase the interest on the loan attached to the offset. If the offset is on your PPOR home loan the increased interest is non-deductible. If its against your wife's IP then she gets the enhanced deduction.

You may be confusing use of borrowed money with an offset. Using credit proceeds in an offset is NOT borrowing money. You have to consider what loan is attached to it.

 

Thanks @Paul@PFI. The card is under my name and i have loan A attatched to offset ac A what i would like to do is use the credit card to pay those expenses and then transfer the fund from offset ac A to my credit card. If i do that would i be able to claim interest on loan A as tax deductible or consider these kinds of transactions as acquisition costs?

 

Not sure but seems unlikely.

What did your tax adviser say ?

 

QUOTE="Paul@PFI, post: 225349, member: 48"]Not sure but seems unlikely.

What did your tax adviser say ?[/QUOTE]
They said i can do that. I am not sure if i should.

 

They said i can do that. I am not sure if i should.[/QUOTE]

Who said?

 

M

Who said?[/QUOTE]
My Accountant

 

So are you trying to refinance a cc debt with a loan?

Did you see my tip on this?

 

I red some and whenever I get a chance. They are great tips.
I know there is no way to reimburse myself. I am still lost, if for example my split loan A is 200k and i put cash 200k in offset loan A. When i found a property i need to pay $500 to BP so I use my cc to pay the fee can i then transfer the fund from offset A of $500 to pay back to the cc?

 

Assuming the offset is a loan then you would be just refinancing one loan with another - which doesn't change deductibility.

See
Tax Tip 12: Credit Cards and Tax Issues

 

Thanks heaps Terry!!!

 

Quick question around an acquisition Cost. Is it only CBA that charge a settlement fee for new purchases? my other banks don't seem to charge this fee (nor have the conveyancers)

 

No, many do, mostly the smaller non bank lenders.