Reno costs/ deductions with no income

Discussion in 'Accounting & Tax' started by myusernam, 31st Aug, 2016.

Join Australia's most dynamic and respected property investment community
  1. myusernam

    myusernam Active Member

    31st Aug, 2016
    HI just wondering I have an IP that was bought last year and early this year I changed it's purpose to investment, paid the extra stamp duty and it has been vacant ever since while I renovate. Can I claim all the deductions I am incurring even there is no income to offset? (not just interest but reno costs... I understand there's an owner builder or capital construction threshold? I'm trying to be under that. My purpose is to rent out in a few months. Do I need to say it has been avaialable for rent this whole time but no one has been interested? I mean they are happy to take my stamp duty to make it an IP, and the renos are just taking a while as I'm doing myself.
  2. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

    19th Jun, 2015
    Yes you can claim interest costs and depreciation attached to your reno IF the property is "available for rent".

    No you misunderstand. There is no threshold AFAIK.

    This is in conflict with the law which says it must be "available for rent" to claim the deductions.

    Making claims for deductions on your tax return is on a self-assessed basis BUT you must be able to substantiate your claim if audited. I'd suggest you do not lie to the ATO.
    Colin Rice likes this.
  3. hobo

    hobo Well-Known Member

    18th Jun, 2015
    Do you perhaps mean the threshold over which you would need an owner-builder licence, vs just DIY reno-ing?

    ie as per this link: When you don't need a licence

    "In certain circumstances, you don’t need a QBCC licence. This includes carrying out building work as:

    • an owner carrying out work on your own property where the work is valued at no more than $11,000 or as an owner builder carrying out building work under a permit"
    So AFAIK, if the works are going to be worth more than $11,000, you'd have to apply for an owner-builder licence, but if under that then no other impost (apart from ensuring you use licenced subcontractors for certain stuff eg electricals etc).
  4. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

    18th Jun, 2015
    It doesnt necessarily have to be available for rent. If it was under construction for example.