Tax Tip 137: Claiming Stamp Duty on Properties located in the ACT (Part 2)

The key issue is not to determine the ACT duty deductibility at the date you incur it but to consider the expected use of the property. If you rent the property for three months then move in an apportionment may be required. I have never seen the issue addressed elsewhere and consider a determiantion by the Commissioner may be sensible.

The BA fee is capital. This is addressed is the BA tax ruling.

 

The duty is not an element of the costbase used to determine CGT profit if you claimed a deduction for it.

 

Guys, to understand it better, example - If I buy a property in Jan as investment property and move in July the same year, but technically it is next financial year, can I still claim deduction on full lease duty or only pro rata%.

What does the rule say? That you have to stay 1 year from the date of purchase?

 

what do you mean by 'technically it is next finanical year'?

Generally an expense is claimed when it is incurred.

 

Ok. I am settling a property in Jan 19 as Investment. I will move in July 19, so do you mean I can claim 100% stamp duty in my tax deduction for FY18-19. Even though I just kept it as investment property for less than 6 months.

Because somewhere I read that if you move in your investment property, you can claim on pro rata basis. That is why I am confused, as in how long it has to be investment before I can claim 100% of duty

 

I have answered this in the first post of this thread. Since you will live in it you will need to apportion.

 

Good question. For ACT conveyance duty its likely 0% deductible since at the time it is incurred (contract date) the purpose for the acquisition is as your own home. Changed use in July doesnt reflect as a basis to apportion since the duty incurred relates to a time when it was intended to be your own residence on acquisition. There is no time period to stamp / conveyance duty. That same basis applies in every state and ACT is not different. Where ACT is different is a property acquired as an investment property can claim the duty as deductible (since it is leasehold expenditure) where in other states it is capital expenditure relating to a transfer of land title.

 

PBR 1011948300688
New link for this PBR is
https://www.ato.gov.au/law/view/document?docid=EV/1011948300688