What can I claim on tax?

if my tenants ask for a fly screen obviously I can claim that to lower my taxable income. What about if I want to put in something like a Tesla power wall, is that claimable or is there some sort of rule on what you can and can't claim?

 

Capital expense so depreciated

 

Claim EVERYTHING

(and then debate the detail with the ATO )

 

Even though it's something I want in there and not something the tenant asked for?

I'm liking this idea

 

nothing to do with the tenant

 

Actually an expense will only be deductible if it relates to the production of income. But any improvement you do would help retain tenants and/or improve the rent received now or in the future.

 

need to consider whether it's a capital expense as @Terry_w said, or a repair; as this will determine how you deduct it

 

Strapping on a battery pack to the ol' house? This will be interesting lol.

If the govt was fair dinkum about renewable energy benefits you'd think they'd have some special accelerated depreciation for these strap on battery packs.

 

Why would you put a powerwall in now? It can be depreciated, but that's hardly a good reason. If this is your future PPOR, I'd save the cash in an offset (or reinvest or whatever) and put in the Powerwall when you're ready for it.

 

This is what I do, record everything in a table on your spreadsheet called 'maintenance, repairs and improvements' and itemize all items with a column for amount and another for description. This is done for each property which has its own worksheet within the FY workbook. Email spreadsheet to your accountant and of FY and let him decide if it's deductible or depreciable. If it's an improvement he'll add it to the depreciation schedule which you gave him after purchasing the property.

 

I'm moving in at the end of the year hopefully, I was trying to get one in and tax deductible before I move in. I am not sure if this is counts as "relates to the production of income" so still not really sure if this is something that would be tax deductible or not.

 

A strapping lad like you @datto?

Thinking of a new Ryobi battery laen mower from Bunnies?

 

A repair is generally deductable straight away whereas a replacement or new expensive item is capital expenditure and depreciated over a number of years, each item as an effective lifespan which determines over how many years it gets depreciated/claimed, an Accountant or Depreciation expert should be able to inform you better.

So a repair is when you fix part of something whereas a capital expense is either new or replacement. Fixing 1 or 2 pickets on a picket fence would be a repair, replacing the whole fence would be a capital expense. Hot water service breaks down, plumber puts in a new part, that would be a repair, plumber puts in a new hot water service, that would be capital expense.

So putting in a Tesla power pack would be a capital expense and if you were able to claim would only be able to depreciate/claim a set percentage of the cost per year whilst the property is producing income. Each item as a depreciable rate per year, I don't what it is but lets say it is 20%, which means you can claim 1/5 of the cost per year for next 5 years if the property is rented. If it is only rented for 1 yr, then you can only claim for one year.

Knowing your intentions I would say you are definitely playing in the grey area...is this expense necessary to maintain current rental income, is it going to increase rental income.

As they say, seek professional advice

 

Hmmm, sounds like I may as well wait until I move in, even if I can claim it, it will be depreciation so will not be much however they do have a limited life span, if I put it in now then 10 months of it's life will be giving my tenants free electricity rather than me .

Shame to waste that power from the 26 solar panels on the roof .

So the screen door on the detached shed (sort of a granny flat thing) that the tenants asked for, because there wasn't one there before does that go as depreciation?

 

I believe if it costs less than $300 you can write it all off in the first year.

 

, it cost a LOT more than that to match the crimsafe doors everywhere else on the house.

No big deal, it's only money right

 

The Tesla powerwall is depreciable as it is capital expenditure. The effective life is 15 years. Using the Diminishing Value Method the annualised rate is 13.33%. Prime Cost is 6.67%.

The question here however is who benefits ? Is the tenant gets largely free power are they prepared to pay you additional rent for the unspecified benefit ? Without additional rent you have invested in a expensive gadget with no payoff.

A Tesla powerwall would always be better installed in your own home NOT a rental property unless the rent was more (say) than 140% of the annual cost. The "free" electricity is not assessed and the deduction not allowed meaning you save tax free dollars. However with a rental the higher income is taxed so you lose 1/3rd or so of the benefit IF the rent exceeds cost. If it is less than cost you are losing even more....Its like the issue with putting savings into a offset.

If you move into a rental as your PPOR you cannot write off the Telsta unit.

 

Keep in mind the prices of these are coming down rapidly. I have the Tesla 2 is about $8k now and they were about $15k a year ago.

 

Yeah I might wait a little while, We don't move in till the end of the year and I don't think we really need it as soon as we move so may wait even a couple of years.

 

No. I Iike the smell of fuel. It's organic.