Renovate and Rent- Capital work deductions

Hi all,
New to this forum and already learnt a lot in the past few months.
I have a 3br PPOR which I purchased in 2012 in NSW. I am planning to rent this property and buy a ppor elsewhere in NSW.
The current property has an old kitchen and floorboards. I renovated my bathroom last year.
My question is if I renovate the kitchen and floor board in the property when I am still there and then I rent it out- can I claim capital works deduction? or do I need to vacate the property and move into a new one and then do the renovations to claim capital works deduction? Your help will be much appreciated.
Thanks
Peace2all

 

Absolutely!

- Andrew

 

Yes. 2.5% per year on building works

 

Thank you Andrew

 

Thank you Terry. Do I use Quantity surveyor to determine how much I can deduct after the renovations and then move out of the property and rent it? Is that ok?

 

Just prior to vacating get a QS report. It will identify
- Div 40 (likely $0)
- Div 43 - Building element at 2.5% and
- CGT loss benefits from the Div 40 that would have previously been available !!

The QS will consider what you spent and incorporate it,

To maximise plant and equipment deductions, defer install of any new items (eg appliances, HWS, AC etc) until you move out. This will preserve the Div 40 on those (new) items. The QS doesnt "need" to include these as the tax agent may be able to add them. But if the QS does dont double up by telling the tax agent if its already in the QS report

 

Thank you Paul.