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How to claim cost of planning a renovation?

Discussion in 'Accounting & Tax' started by CargoCult, 7th Jun, 2016.

  1. CargoCult

    CargoCult Member

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    I'm studying the viability of a modification to an investment property. So far, I have only spent a couple of hundred dollars on fees for photocopies of plans from the local council and title office. I was also advised to undertake a feature level and/or re-establishment survey.

    Let's suppose for any reason (council advice, budget/finance constrains) I find out such modification is not advantageous after all. I would drop the plan but have been incurred about $2000 but no improvement would be actually made.

    Would this amount be claimable in any way? Capital expense?

    If not, can I at least use borrowed money from my equity LOC to pay for those and claim the interest?
     
  2. bob shovel

    bob shovel Well-Known Member

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    Are you the famous uni student getting around?? sounds very uni like

    If you have an investment property you'd have a fair idea of what you could/couldn't do so unlikely you'd spend 2k on planning something that won't go ahead, or you'd tweak it so it could go ahead.

    I'm not a tax expert so can't help you :)

    Good luck with it
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    This may or may not be capital expense. You would have to have a look at s110-25 ITAA97 and see if it could fall into one of the 5 elements of a cost base. - I don't think it would off the top of my head.
     
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Its possible some of the costs are preliminary to the proposal which would be a CGT cost. A QS report BEFORE you start and after will identify any scrapping deduction available.