Tax deductibility of selling costs of property that didn't sell?

Hi

So I've put an investment property up for sale and incurred the costs of cleaning, property styling and sales agency. Unfortunately the offers weren't where I was expecting, and I did not proceed to sell.

The property is now back to being leased.

I'm wondering are the selling costs tax deductible in the case of a non-sale?

Any guru's advise is much appreciated, so thank you in advance.

Cheers

 

Not against income. Some of the costs may be used to reduce CGT when eventually sold.

 

Hi Terry

Thank you for your reply. I knew someone would know this!

Does it matter even if the sale is a number of years later?

Cheers.

 

i cant see how these selling agent costs would make up any of the five elements of the cost base.

If it earned rental income some of the costs such as cleaning etc might be deductible. if not rented then cleaning might be a third element of the cost base.

Agents fees on a failed sale or sale that didnt proceed dont generally form part of the cost base as no CGT event has occurred at that time

 

Maybe the 2nd element - if they continue to try to sell?
incidental to disposal?

 

yes terry. if they continue to try to sell then the agents fees would be fine.

The following PBR confirms this

https://www.ato.gov.au/rba/content/?ffi=/misc/rba/content/1011321570819.htm

If however they couldnt sell and then gave up and rented out again like he said he has done I dont think it will be a cost base element.

 

Yes I agree.

But some of the costs may be deductible, depending on what they were.

 

Certainly gets technical. The property was leased for a couple of years until the lease expired. I then put it on the market for sale. The costs to do so were the selling agent's advertising cost, cleaning and styling. The styling cost the most at $5K, and is what I'm hoping could have some tax relief. As mentioned, I did not end up selling the property given the offers were much lower than expected, and I returned the property to the rental market. Interestingly one of the parties who offered to buy became the tenant.

 

Perhaps the styling relates to the rental income in that case - bit of a long bow though.

 

depends on what type of styling was done. possibly capital expenditure and can be depreciated.