Tax Deductions during a demolition and build

Hi there,

Have googled and searched this forum with no luck for an answer to this question... I wanted to know how the following items are treated for my tax return.

Last year I demolished an old house and am in the process of building a triplex on it. I have got a few costs that I haven't come across in my previous tax returns and wanted advice as to which ones would I be able to claim as an expense (and what type) in my tax return - immediate write offs like interest/maintenance,etc or even as a longer term capital cost at 2.5%,etc.

The costs are:
Deposit to Builder for build of new properties - $2,000
Contour Survey - $891
Removal of Sewerage - $250
Verge Bond - $318
Removal of Power - $324
Demolition - $14,080
Total - $17,863

Mainly I want to know if/how to claim for my demolition cost of removing the house seeing it is the largest one there - is it not tax deductible at all in terms of negative gearing? It is a capital 2.5% cost ? Is it something you can write off somehow? Wasn't sure.

Thanks for any ideas or assistance

 

You will need specific tax advice. Probably not deductible

 

No tax planning for this project ? I am stunned each time I read about a $1M+ project that commences without apparent tax advice. Failure to plan is a plan to .....

Some of the general information that may help can be found in our developer toolkit. How you treating the GST on all the costs out of interest ? Keeping a record ? Even if you dont plan to sell record keeping with and without GST will likely be needed.

Tax advice should also include whether you have ability to claim scrapping and timing of some deductions. What may or may not be deductible could also be affected by current laws before Parliament too.

 

Not quite sure why you would even reply with a comment like that. It’s like saying water is wet or the sky is blue... it could be a correct statement , but helpful? Probably not.

 

T

Thanks for the toolkit Paul. Looks good. Will read further. planning on holding and retaining for more than 5 years so GST should not be an issue. Thanks for the advice.

I have had tax advice a few times over the years and have also read widely enough to do my own tax returns on a normal negative geared IP. Likely to engage an accountant but I enjoy finding out about the what and why of how things are worked out, so appreciate any info.

 

Well you are asking for complex legal advice in a post. Some people don't appreciate the complexity. Not sure if you are one of those or not.

The second sentance was surely helpful?