Hi PropertyChat People I recently purchased a property for investment reasons and before I can rent it, the renovation bill has come to the following: 1. Approx 15K on repairs (not registered for GST) 2. Approx 12K on cabinet work (not registered for GST) 3. Approx 2K on electricals First two tradies are not registered for GST (both are ABN registered small businesses) and are still able to give me an invoice, without GST. I am concerned that if I go with them, later down the line, I might experience issues claiming tax deductions - based on this renovation costs. Can someone please guide me here ? Second, are these renovation expenses claimable during the filing of tax during 2020-2021, I was told by someone that I am unable to claim them now, and these should be deducted when I sell the property to minimise my Capital Gains at the time. I would have preferred to pay the renovation expenses from out of pocket, and then refinance the loan, return my out of pocket expenses, and have the whole interest as tax deduction for the property. Instead of keeping receipts for renovation and claiming them years down the line. Thank you for your time. I am grateful.
none of these sounds deductible immediately. Potentially eligible for Div 40 Capital Allowance or Div 43 Capital Works Deductions.
Deductions or CGT calcs or Div 40/43 all require a invoice. Whether they are registered for GST is not a concern for a input taxed acquistion. Its only a concern for a taxable supply and you seek to claim input tax creedits. In that case a witholding declaration is required. But it wont impact you as I assume your investmnet property is residential. If its commercial seek tax advice as you can be impacted. Paying cash means you cant claim a thing.
