I'm an Australian Citizen and have recently become a non-resident. I have disregarded the disposal of an apartment I own in Europe because I expect to return to Australia in a few years. I have owned this apartment for 9 years now. While the apartment has been rented out I have always reported the foreign rental income. I have spent some time going through many previous posts and couldn't find a couple of answers. I have two questions:
1.- Since I have disregarded the disposal of that apartment in Europe, this property has now become Taxable Australian Property. The property will continue to be rented out while I'm a non-resident. I assume I need keep reporting the rental income and rental expenses of that foreign property (now TAP) while I'm a non-resident. Is my assumption correct?;
2.- I have undertaken substantial renovations of the apartment in early 2023. I say 'substantial' because the definition of 'substantial renovations' on the ATO website fits well with the works I have done. I demolished all the internal walls, replaced the floors, rebuilt the internal walls, replaced the bathrooms, replaced the kitchen... I only keep the external walls of the apartment and redid everything else. The layout has changed completely. I have spent a fortune on fully renovating the rental property. The apartment was originally built in the late 1970s but I bought it in 2015. According to the ATO website, if the renovations are substantial, the property is treated as new residential premises and the cost of the renovations will be deductible as capital works. Since the property is now treated as new residential premises I assume the apartment has been built in 2023 and not in the late 1970s anymore and I can deduct the cost of renovation works over 25 years at a 4% per year. Is this assumption correct?
Thanks legends!
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