I think no but are Stamp duty and legal fees from the purchase of IP tax deductible?

just gathering my docs into one place for when tax time comes around and I want to make sure I have everything.

Receipt from legal fees and the Stamp Duty are not deductible are they?

I did a bit of a search of the tax forum and it probably is in here somewhere but to be honest I am not 100% sure what to actually look for.

 

No. They are also not borrowing expenses (a common misunderstanding)
They add to the costbase and they reduce the future profit as an acquisition cost.

The lawyers settlement sheet is also important
- Lawyers fee are a costbase item
- Some deductible adjustments for vendor payments for rates, water, strata occur !! Strata special levies arent deductible.

 

Cool thanks for the info, I have a settlement sheet but it's from the lender not the lawyers, is this the same thing?

 

Could be deductible where the property leasehold. Such as in ACT

 

I am not sure what leasehold is but I assume mine isn't that? QLD house?

 

Strata special levies on settlement or strata special levies in general?

 

Lenders dont issue a property settlement sheet.

 

Special levies at all are not deductible.

 

Not leasehold. Not deductible.

 

Freehold probably.

Leasehold is land owned by someone else and leased out on long term leases. The tax consequences are different because when you 'buy' the land you are actually transferring a lease and not title to the land.

 

Leasehold often in NT but also ACT (commonly).
What does your tax adviser say ?

 

Is interest paid deductible borrowings for Investment Property purchase:
Stamp Duty ?
Buyers Agent Cost?
Legals?

 

It could be

 

All special levies are non-deductible

Rental Property - Tax Issues - YouTube Episode 4

 

I'm totally confused, I've read this topic, as well as another topic asking the same question. I do understand stamp duty is not tax deductible, but the ATO website says stamp duty & legal fees can be / can't be claimed. Could someone put me straight in regards to the definitions the ATO are referring to?

Expenses deductible over several years - borrowing, depreciation, capital works

What can you claim?
You can claim all of the following as borrowing expenses:

• stamp duty charged on the mortgage
• loan establishment fees
• title search fees charged by your lender
• costs (including solicitors' fees) for preparing and filing mortgage documents
• mortgage broker fees
• fees for a valuation required for loan approval
• lender's mortgage insurance, which is insurance taken out by the lender and billed to you.

What are you unable to claim?
You cannot claim any of the following as borrowing expenses:

• stamp duty charged by your state/territory government on the transfer (purchase) of the property title
• legal expenses including solicitors' fees for the purchase of the property (these are capital expenses)
• stamp duty you incur when you acquire a leasehold interest in property such as an Australian Capital Territory 99-year crown lease (you may be able to claim this as a lease document expense)
• insurance premiums where, under the policy, your loan will be paid out in the event that you die, become disabled or unemployed (this is a private expense)
• borrowing expenses on any portion of the loan you use for private purposes (for example, money you use to invest in a super fund).

Stamp duty and legal expenses may be included in calculating the 'cost base' of the property for capital gains tax (CGT) purposes as they are capital expenses.

If you repay the loan early and in less than five years, you can claim a deduction for the balance of the borrowing expenses in the year of repayment.

If you obtained the loan part way through the income year, the deduction for the first year will be apportioned according to the number of days in the year you had the loan.

 

You are confusing transfer duty and duty on mortgages which has been repealed in all states

 

Can I claim the RE agents selling commision fee and any money I put to prepare the property for sale?

 

If you are selling, then you can deduct the costs of selling (ie legals, agent commission, advertising, staging etc) from the sale price received. This will reduce the capital gain you make (or increase a loss ).

 

This is capital expenditure. One of many complicating issues when you sell.

 

So it is not clear in ato guidelines if these can be claimed or there are otger factors to be considered such as?