IP Renovation Tax Deductibility

Scenario: Let's you buy an investment property for $500k against a loan of $540k including stamp duty and expenses. You then obtain another another $100k loan and renovate the property.

Q: Does that $100k add into your base cost? I understand you can deduct it at the time of CGT calculations but can you deduct the interest on $100k renovation loan?

Any other considerations?

 

Yes it will ADD to the costbase, Yes. you can claim the interest on the additional loan.

The renovations may mean you need to get a updated QS report. Whether there is any scrapping deduction, outwards deductibility etc needs more information and the QS may guide much of that then flick you towards personal tax advice. If the property is newly acquired then its unlikley any element of the cost is a repair.