our business is constructing a property on which our 2nd early learning school will be situated. while constuction is underway, are the utilities such as water and electricity (which are needed for the builders) tax deductible?
Hi @NatalieSebbag,
You'll need to look at including the costs in the third element of the cost base when working out capital gains tax on disposal of the property.
Hey @NatalieSebbag,
You may be able to claim a deduction for the construction costs this is called a capital works deduction. There are different deduction rates depending on:
Otherwise when you sell and it triggers capital gains tax then you may be able to add the costs to the cost base which will minimise the capital gains.
@AnitaATO Hi Anita - i am not asking about the construction costs themselves, i am asking about the outgoings such as utilitisies ie. council rates and water rates, are these deductible whilst the building is under construction? thanks@AnitaATO
Hi @NatalieSebbag,
You'll need to look at including the costs in the third element of the cost base when working out capital gains tax on disposal of the property.
Hi Caro
I am just confirming that the rent we are paying with regards to this site (the site has an old building on it which is currently being demolished and a new building is being constructed) is tax deductilbe whilst construction is underway? ie. rent does NOT form part of the 3rd element holding costs and so IS tax deductilbe during construction of the new building. Please confirm
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