Permanent to Short Term Rental Costs

Discussion in 'Accounting & Tax' started by Moffat, 5th Aug, 2019.

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  1. Moffat

    Moffat Member

    Joined:
    17th Sep, 2018
    Posts:
    9
    Location:
    Brisbane
    I am converting my IP from permanent rental to short term holiday rental. In doing so I will be incurring the following costs;
    - using a removalist to move some of my existing furniture from my PPOR to my IP
    - incurring interest costs for approx 1 month in between the existing tenant moving out and setting up the property for AIRBNB etc.

    Questions?
    are the removalist costs caught by the ATO ban on travel costs?

    Is the interest and other holding costs incurred in the period between when the current tenant moves out and when the property can be furnished/photographed/advertised deductible?
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,536
    Location:
    Sydney
    1. This may be a capital cost eligible for Div 40 depreciation. However as the assets are used the cost is not eligible for depreciation as a cost of installing the assets. So effectively non-deductible for the assets and the removalist costs. This is not a travel cost.

    2. Possibly.

    There could be concerns demonstrating the property is continually available for rent (and not available for private use even for a quiet weekend or two !!) with any short term holiday let. Keep records to demonstrate you are compliant.