Settlement in mid of June_Can I claim anything?

Hi Fellow

After months of property search and this & that, finally I am in process of having settlement for an investment property in 12th June. Before I can rent it out, I need to do some repair and upgrade, so trying to organize the materials like paint, pave, air condition, dishwasher etc, so I can start the work once settlement is done.

As this is my first investment property, just wanted to know if I will be able to claim anything that I buy this month when I do my tax return for this financial year. If so, what will I be able to claim ? I am paying all of the repair items through my credit card. So will a tax invoice be fine to claim for them this year ? Any suggestions would be great !

Thanks

Roger

 

sounds like initial repairs known at the time of purchase. you would capitalise these items and depreciate over time not claim as a repair.

 

Many of these costs may be initial repairs which are not deductible. They remedy defects evident (or not evident) at the time of acquisition. Some of them may also be depreciable. The QS report may be best obtained after you complete the works

Generally costs are deductible when the property is available for rent. ie after completion of the repairs

 

What would happen if someone advertised for rent then repaired? To show it was available...

 

they would still be initial repairs. wouldnt change even if the property had been rented for a month.

if however had rented for a month and the tenants caused the damage that would be different.

 

What about mortgage interest during that month whilst doing the repairs?

 

I have the same query

 

Usually interest is paid a month after settlement so I didnt think there would be any

 

Generally deductible from the time it is available to rent. Where the property is not available for a period due to initial repairs there could be another basis to deduct the INTEREST (only) prior to then such as the principles in Steeles' decision. This is common say for a deposit where the interest may be two-three months prior to ownership.

 

It can't be available if it is not habitable just because you put up an ad, it would have to be habitable and available IMO.

 

Yes...The ATO describes some issues here : Expenses you can claim

 

Thanks for the reply Paul. I get it now. I will be making purchase of all aircon, paving etc from my equity loan that I had used to pay for deposit of this IP. CBA has sent me a debit card linked to this equity loan. I guess I can use this card for these purchases. Then when the property goes on rent, I will be able to claim interest. But for tax purposes, is it better to buy this month or next month considering its a new financial year ?

 

Bump

 

What's the bump for? Your questions were answered above - up to you to decide now how you approach it.

 

Have to admit, I was going to ask exactly the same thing.

 

Maybe hoping someone gives a different answer so he can print off and use as evidence in court

 

Take care with that debit card the bank gave you. Acquisition costs may be ok but beyond that for further costs do they guarantee interest deductions? I will assume they dont give you an ato product ruling. I see no specific issues with improvements but there will be a issue at a time....ie paying outgoings or if you engineer a lower ppor debt vs a highly geared ip

 

Hi Terry,

Thanks for the response. I actually was wanting to hear from Paul about my question to his reply. Thats all.

 

Ah! Is that possible Beachman I will surely do it then..