HI just wondering I have an IP that was bought last year and early this year I changed it's purpose to investment, paid the extra stamp duty and it has been vacant ever since while I renovate. Can I claim all the deductions I am incurring even there is no income to offset? (not jus tinterest but reno costs... I understand there's an owner builder or capital construction threshold? I'm trying to be under that. My purpose is to rent out in a few months. Do I need to say it has been avaialable for rent this whole time but noone has been interested? I mean they are happy to take my stamp duty to make it an IP, and the renos are just taking a while as I'm doing myself.
Talk to your Accountant. Advice from here is not something you want to rely on when your hard earned money is at stake....
The ATO website is also pretty good at showing examples of how treat situations such IP's.....www.ato.gov.au/General/Property/In-detail/Rental-properties/
.....but seriously pretty much any tax accountant can tell you what you need to know about an IP in 5 mins, and then how you should approach it personally in about 30mins....should be the first thing anyone should do before spending a cent. My accountant saves me multiple times his fees....
I have 2 IP and yes I claim renovations and lots more talk to your accountant they will know what to claim ie one of mine is in a different state to which I live and I can claim airfares hire car etc to inspect it keep all paperwork that you spend on it
Renovations are treated as capital improvements usually which increases your cost base and helps to reduce CG Tax when you sell. Also renovations and the whole building can be depreciated.
There are probably a couple of ways to go with the tax situation so as recommended above talk with a tax agent.
I have 5 IPs and I claim even down to the welcome mat!
Any renos done on an IP are claimable, but my advice is to get a professional Depreciation Report from a trust evaluator and tax agent.
You need to have it advertised "for rent". This will make it a legitimate IP, so you can make claims.
Even if the price is ridiculously high (to scare away tenants, while you renovate)
So quickly bung in a cheap ad on a website somewhere, or better yet QUICKLY finish your reno and get a tenant in there!!
I like how accountants are being referred to as tax agents 
.
My dad reckons that accountants are just ATO workers on contract 
I reckon he might be right 
Select to expand quotekk said..
My dad reckons that accountants are just ATO workers on contract
Pretty much...I mean, you need to comply with ATO laws and that is what they will help you do. If you want to avoid paying tax then don't go to an Accountant.....and be prepared for the potential fun that avoidance may (and should) bring you.
The key is that a good tax accountant will make sure that you are set up to comply as efficiently at possible. ie pay the absolute minimum required by law.
Select to expand quotekk said..
I like how accountants are being referred to as tax agents .
My dad reckons that accountants are just ATO workers on contract
I reckon he might be right
Have to agree,
I came into a sum of money a few years ago, not a huge amount but enough to say buy a new car. My accountant advised me to pay off my HECS debt. I chose to use the money as deposit for an investment property. This property has gone up around $200K in value since that time and generates around a $300 a month income after expenses.
Select to expand quotekk said..
I like how accountants are being referred to as tax agents .
My dad reckons that accountants are just ATO workers on contract
I reckon he might be right
Tax agents are paid to resolve your taxation issues. They are meant to give you the best deal but within the tax laws of the day. It is also in their interest not to wander off too far from legitimate claims. Don't expect them to provide financial advice as that is not their role, and I bet they will refuse to oblige if asked. I tried that once.
However, you can ask them about what are the legitimate claimable items, and that is about it. My tax agent used to work for the ATO. That is an advantage because he understands the gears and levels within the ATO.
