Announcements
Looking for answers? Search our popular topics or ask a new question.

ATO Community

Re: Claiming deductions on vacant rental property?

Initiate

Views 90

Replies 4

Hi Everyone, 

Can I claim deductions for renovating my rental if it wasn't available for rent for the whole year? 

Do they go in as capital works or do I add them to the cost base when I sell?

It is not my primary residence, has only ever been an investment property & will be rented out again once renovations are complete!

Thanks! 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Taxicorn

Replies 3

@TMarie 

 

Can I claim deductions for renovating my rental if it wasn't available for rent for the whole year? 

Not when it wasn't available for rent, and yes for when it was.

 

Do they go in as capital works or do I add them to the cost base when I sell?

Most likely will go into capital works, which also is added to your cost base.

But then any capital works deductions that you claim or can claim will be subtracted from your cost base.

 

 

 

 

4 REPLIES 4

Most helpful response

Taxicorn

Replies 3

@TMarie 

 

Can I claim deductions for renovating my rental if it wasn't available for rent for the whole year? 

Not when it wasn't available for rent, and yes for when it was.

 

Do they go in as capital works or do I add them to the cost base when I sell?

Most likely will go into capital works, which also is added to your cost base.

But then any capital works deductions that you claim or can claim will be subtracted from your cost base.

 

 

 

 

Initiate

Replies 2

Thanks! That makes sense, so if I put it in as capital works & its not written off by the time I sell I can add whats left to the cost base to reduce the gain? Or I can leave it out not depreciate it & add the whole lot? Does it matter if its the trivial bits like dust pans & brooms? That are 100% bought for the rental, but bought in the year it didn't make any income?

Taxicorn

Replies 1

@TMarie 

 

Not quite.

(1) Add the Renovation cost in as a Capital works deduction and claim 2.5% for 40 years.

(2) Add the Renovation cost as a 4th Element to INCREASE the cost base.

(3) Deduct the amount that you have claimed in total for all capital works to REDUCE your cost base.

 

 

Initiate

Replies 0

Great thank you!