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Arhidis(Initiate)Initiate
13 Feb 2024

Hi,


My accountant keeps claiming special building write off (capital works) each year on my investment property. Why is he doing this if it is reducing the cost base of my property when i want to sell it later? I don't want to be claiming this each year but he says it is compulsory. This makes no sense as to why it would be compulsory if you do not wish to be claiming this and reducing the cost base of the property so you can make more later when you sell it. Makes no sense.

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2 replies
308 views
2 replies

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Bruce4Tax(Taxicorn)Taxicorn
13 Feb 2024

I don't want to be claiming this each year but he says it is compulsory.


Because it is - if the amount has been determined, then cost base is reduced even if you do not claim the tax deduction.


You are actually better off by claiming, because cost base reduction is effectively only 50% - you should be asking accountant to explain all this to you.


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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
13 Feb 2024

I don't want to be claiming this each year but he says it is compulsory.


Because it is - if the amount has been determined, then cost base is reduced even if you do not claim the tax deduction.


You are actually better off by claiming, because cost base reduction is effectively only 50% - you should be asking accountant to explain all this to you.


Arhidis(Initiate)Initiate
14 Feb 2024

Thanks Bruce. I appreciate your reply and understand what you are saying but i thought it would not be compulsory and your choice to either claim things now and save on income tax or claim nothing now, pay more in tax but earn more later when you sell after the CGT because you didn't reduce your cost base by claiming. I say this because in my opinion i earn stuff all anyway so this claiming he is doing makes hardly any difference to me as i'm on a low income. All i see is that it is reducing my cost base by 10k or more each year. Not what i wanted for the future so definately will be selling. Sick of this garbage tax system.


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