Under $300 reno/improvement immediate deductions?

My second IP is due for settlement in the first week of July. I've been reading up on immediate deductions vs depreciation and still have a few questions.

Before renting out my IP I'd like to do some cosmetic changes to the property, mainly painting and landscaping. Overall this will cost more than $300, however the individual cost of each item will be less than $300. Does this mean I can claim it all as an immediate deduction? And if so, and I bought the materials and plants etc this financial year, would I be able to include them in this year's deductions, or would it have to be next financial year as I can't actually use them until July?

And final question, as I'm doing this work before the property will be put on the rental market, would all of these sub $300 costs be added to my cost base instead of being counted as an immediate deduction?

Thanks

 

You need to do a bit more reading. There is an eBook on depreciation on our website if you're interested.
The under $300 thing applies to Assets e.g. curtains, blinds, a heater, rangehood etc.
Paint is not an Asset. Neither is hardlandscaping e.g. retaining walls, paths etc. That stuff is 'building' and depreciates at 2.5%.
You are making improvements to the property immediately after purchase so you are in 2.5% territory.
Plants are never a depreciation thing.
Scott

 

Thanks for the reply, I've downloaded your ebook and plan on reading it tonight. If I was to buy a 2nd hand door and some windows from gumtree, and the cost was less than $300, could this be claimed as an immediate deduction for this financial year, even though they won't be installed until next financial year.

 

Doors and windows are not Assets, they are 'building', so the under $300 write-off does not apply.
As I said above, Assets are things like curtains, blinds, a heater, rangehood etc.
When you install the doors and windows, you will be able to depreciate that work from when the property is available to rent at 2.5%pa.

 

All work undertaken to the property prior to rental occupancy may be initial repairs which are capital expenses and non-deductible. Even then, deferring the expenses until later doesnt work as initial repairs can occur well after occupancy. You need to look at when the defects arose. None relate to tenancy so none are deductible. Best if you complete work before QS report and they can address what occurs with each cost.

Landcape wont be deductible but may add to the costbase.

 

I think it's worth noting as well that, even if doors and windows were assets, second-hand assets are not depreciable anymore (although I haven't been on Gumtree lately. Do people use it to sell new items like doors and windows?).

 

AND you need a receipt. A copy of the gum tree sale page isnt going to pass if its marked cash as there is no evidence of actual payment or change to the price. Settled using paypal it will.

Chris@BMT. Div 43 isnt affected by the "new asset"rule. Doors and windows are likely to be Div43 arent they ? I believe a second hand door is deductible as a repair to a building if eligible (since a door or two is not a replacement of the whole building) and if not (eg replace all timber windows with second hand aluminium ones) the new asset rule only catches depreciable Div 40 items.

 

That's correct, and why I said "even if they were assets"--because they're not. I was merely trying to point out that in an alternative scenario the plan wouldn't work anyway because of that. There should be no difference involved when it comes to Div 43 works/replacements being new or used.

 

I also think many DIYers will assume that you cant use second hand materials full stop. Hope someone just realised that second hand building works can be done and still be eligible for Div 43. Obviously a lesser sum as the second hand materials may cost far less.