Accountant Property Question

Liamdragoon on 20/06/2019 - 01:43

Hi guys,

Tried to find some information in the forums with little luck.
I am currently living in Property A. It was initially rented out for a period, however I recently moved back to in Oct 2018
I just purchased another property B April 2019. My plan is fix up some minor details in property B, Ie paint, renovate the bathroom and kitchen.

My questions for any accountants, if I plan to move to Property B [July 2020] can I claim tax benefits from property B for the financial year of 2019?
My plan would be also to rent out Property A.

Thank you in advance.

Financial

Comments

  • capslock on 20/06/2019 - 08:52
    +1

    No. You didn't earn income from it in 2019.

  • The tiger on 20/06/2019 - 09:22
    +3

    Go to see any professional accountant and pay them for advice that you want. They know better.

    • iamdragoon on 21/06/2019 - 01:17

      Normally I would, but my accountant his going through personal problems( divorce). Hence the question.

  • Gerry H on 20/06/2019 - 10:01

    wat did u purchase B as? if u purchased as home u cannot claim tax. if investment when u move in u have to do a valuation and pay capital gains (or claim tax on capital loss) and change it to home.

    • iamdragoon on 21/06/2019 - 01:18

      Property B was purchased as an investment, Ok cheers.

  • loke on 20/06/2019 - 10:49

    You can't claim a deduction (as you earned no assessable/rental income with the property).

    It would form part of the cost base of the property.

    https://www.ato.gov.au/General/Capital-gains-tax/Working-out…

    See the above link regarding the 3rd (costs of ownership which includes repairs) and 4th element.

    You state that you are moving into the property in July 2020, will it be vacant during July 2019 - June 2020 (2019/2020FY)?

    • iamdragoon on 21/06/2019 - 01:19

      Thank you for the link. It won’t be vacant during that period, it would be rented out.

      • loke on 21/06/2019 - 09:41

        See initial repairs / improvements and depreciation rates div 43 depreciation / BMT (or other quantity surveyor) tax depreciation reports as well, as it will be a rental.

        If your intention is for the property to be a rental see

        https://www.ato.gov.au/Individuals/myTax/2018/In-detail/Rent…

        which also limits you to which deductions to claim, also note the genuine available to rent conditions further down the page

    • Gerry H on 21/06/2019 - 07:39

      no if he bought as investment he can claim the interest and upkeep on tax from his salary. im pretty sure its got nothing to do with whether u rented the property out, although there might be a maximum deduction ur allowed so claim. this is considered capital loss and all capital loss can be claimed just like all capital gain are taxed.

  • brad1-8tsi on 20/06/2019 - 13:12

    On a side note, hope you got Property A valued when you moved in.

    • iamdragoon on 21/06/2019 - 01:19

      Yes property A was definitely valued prior to purchase of property B

  • imotit on 22/06/2019 - 00:02
    +1

    On the basis that you are renting out the property B any non-capital expenditure you incur during the period that the property is available for rent (as distinct for being rented) would be deductible (ie body corp, rates, water, interest), but this would have to be prorated if the period property B was available for rent was less than the full year.

    In regards to the upfront improvements (with possibly an exception for painting which could be deducted immediately) you are proposing to do to Apartment B, the expenditure would be capital in nature and as such constitutes capital works and so is not immediately deductible but rather must be depreciated over the life of the asset (usually 40 years).

    In addition,the upfront repairs would also form part of the cost base of the apartment B and would be used to calculate capital gains when you sell the apartment B in the future.

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