Use Bank money or my own for some IP improvements

Hey guys

I am not sure if this is the right section to ask this.. I am looking for the best and most cost effective/investment approach to do the following :

Right now we are in the process of signing a building contract on a new IP. The builder has recommended we do our own
Landscaping
Concreting
Cooling
Dishwasher install and supply
Install and supply blinds

As we can do those things cheaper and saving money

I have my own genuine savings. So in terms of an investment point of view. What would be the better way to pay for those things? Pay with my own money and claim on tax? Or tap into our loan?

If you guys need some figures I can give you those

 

Well, for a start, if you do these yourself you can’t “claim on tax”, but you can add these costs to the base costs for cgt calculations.

Maybe some depreciation.

But the tax position won’t alter whether the builder does these or you do them yourself.
Marg

 

You also have to be careful about maintaining the connection between borrowing and use.

example you buy some plants for cash - you cannot replace the cash with borrowed money. You would need to use a credit card with no other debts incurred on that card before the purchases or after, until the balance is refinanced.

 

Get quotes/invoices for the work, send these to the bank when you send them the building contract, borrow the money to complete the works.

 

When I meant do these myself. Some I would get a tradesman to do it and some I would litterly install myself
Concreting - Get tradesman to do that
Landscaping - Do myself but buy materials for that
Cooling - Get tradesman to do it and supply

Thats how I would go about if I wanted to borrow the money to do these things. But I am asking is if I should use my own money and claim on tax on the things that I paid tax for or tap into the loan instead and allow rent to pay for it?

Hope I am explaining myself clearly I may not be

 

Your not explaining it clearly because you dont understand it.

 

Your not explaining it clearly because you dont understand it.[/QUOTE]

Probably not. So please help me understand it

 

You spend $100 on concrete. Use your own money or borrow, doesnt matter. The 100 is part of your cost base.

Done right, if you borrow the interest on the 100 might be deductible.

Rent, tax youve already paid (whatever that means) doesnt matter.

 

Thank you !

 

You really need to talk to an accountant at a proper sit down. Dont know what you dont know and all that.

 

There are two issues.

1.is the expenditure tax deductible eg dishwasher. I understand that a new dishwasher would be depreciable under the revised rules

2.is the interest deductible on any borrowings used to finance the expenditure. A:depends how you have structured it. You can’t reimburse yourself.

 

For saving money, it is a good idea to do it yourself.

For tax purpose, may not

 

You could create a new equity split on another property and use these funds for the work

 

From my experience, you will probably save more from doing things yourself than the savings you would get back on your tax.