Hi Team, I recently bought some plants and trees for my Airbnb property. Just wondering if I can claim the costs as a deduction (depreciation expense/ capital work deduction), or capitalise them into the property cost base? I believe good landscaping can add a touch of style and a welcome atmosphere which increases booking and my rental income. Thanks in advance.
Hi @P_D123
Costs involved in landscaping a property 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.
Have a read of this article Renting out all or part of your home? What you need to know
for your tax return | ATO Community and information from our Rental Property Guide Rental expenses - including what you can't claim.
Hi @P_D123
Costs involved in landscaping a property 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.
Have a read of this article Renting out all or part of your home? What you need to know
for your tax return | ATO Community and information from our Rental Property Guide Rental expenses - including what you can't claim.
What about if it’s just a few plants costing under the $300 or $600 for depreciating assets? Can it just be claimed as a deduction in current tax year and do you also add it as cost base for CGT or only for CGT claim later?
Hi @thinkercat7,
If your plants cost $300 or less, you can claim an immediate deduction for the full cost in the current tax year. This applies if you use them mainly for producing rental income and they're not part of a set costing more than $300.
There are specific rules when claiming expenses for horticultural plants and specifically grapevines. It's best read through the guides and tax rulings for further info.
For CGT purposes, any deductions you've already claimed can't be included in the cost base. The cost base and deduction treatment are separate - you can't claim both.
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