Join Australia's most dynamic and respected property investment community

Capital works deduction & depreciation?

Discussion in 'General Property Chat' started by RenegadeDom, 8th Jun, 2016.

  1. RenegadeDom

    RenegadeDom Well-Known Member

    Joined:
    22nd Feb, 2016
    Posts:
    88
    Location:
    Sydney
    I'm in the process of completing an attached secondary unit and am aiming to have it complete and certified by end of the financial year, should be finished next week. I've already organised for a depreciation report to be completed. I've been reading that capital works deductions can only be achieved for a period that the dwelling can be rented. From ATO website:

    You can only claim deductions for the period during the year the property is rented or is available for rent.

    If you have claimed, or could have claimed, a capital works deduction for construction expenditure:

    • you can't claim the same amount as a deduction for decline in value of a depreciating asset, and
    • the amount must be excluded from the cost base of the asset.
    Does this mean I can't claim any capital works deduction this year as the unit will only be available for rent for approx 2 weeks? Can I not claim depreciation and capital works deduction at the same time?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,989
    Location:
    Sydney
    You could claim 2 weeks worth.
    You can claim both at the same time, but not on the same items of course.