I have rental property.
the tree is not good, rotten eaten by termites. The cost $2000 to cut the tree and removed from the property. Can I claim this amount $2000 as deduction/expense on my tax return ?
Anything I need to know ?
If you completely remove the tree, you cannot claim a deduction for the cost, even if it is diseased or dangerous, because it is a capital expense. It is a capital expense because it is one-off and provides an enduring benefit, being the complete removal of a potential hazard. Removing the tree also removes the potential for future maintenance cost relating to the tree, which is an enduring benefit.
If you are removing damaged parts of the tree, then it is maintenance and can be deducted.
Cheers
If you completely remove the tree, you cannot claim a deduction for the cost, even if it is diseased or dangerous, because it is a capital expense. It is a capital expense because it is one-off and provides an enduring benefit, being the complete removal of a potential hazard. Removing the tree also removes the potential for future maintenance cost relating to the tree, which is an enduring benefit.
If you are removing damaged parts of the tree, then it is maintenance and can be deducted.
Cheers
HI @AshleyATO ,
Thank you for the reply. I have another queries.
It is not completely removed. There is some left, the root and part of the tree about 10cm, can I claim as deduction ?
So, if it is capital expense, how or when I can claim this ?
Thank you
Costs involved in landscaping a property (such as this much work on the tree) are generally seen to be capital in nature. Landscaping would generally amount to an improvement to the property which would have an enduring benefit.
These expenses generally need to be added to the cost base of the property for CGT purposes.
Hi,
So I cant claim this expense ? any link to read for the cost base of the property for CGT ?
You can't a deduction of the cost of removing the tree as it is a capital expense.
Have a look at the ATO page on cost base for information on adding the expense of removing the tree to the cost base of your property
You are also welcome to apply for a private binding ruling to obtain a more detailed answer that takes all of your circumstances into account.
A private ruling is binding advice that sets out how a tax law applies to you in relation to a specific scheme or circumstance.
For more information see Private rulings and Applying for a private ruling on how to send in a ruling application.
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