Profile cover photo
Profile photo
BDSA Quantity Surveyors
45 followers -
BDSA Quantity Surveyors providing tax depreciation and quantity surveying services to property investors, builders, developers, owner builder. Sinking Funds, insurance valuation, depreciation, cost estimates
BDSA Quantity Surveyors providing tax depreciation and quantity surveying services to property investors, builders, developers, owner builder. Sinking Funds, insurance valuation, depreciation, cost estimates

45 followers
About
BDSA Quantity Surveyors's posts

Post has attachment

Rental Propety - Initial Repairs 
 
Initial repairs to rectify damage, defects or deterioration that existed at the time of purchasing a property are capital expenditure and may be claimed as capital works deductions over either 25 or 40 years, depending on when the repairs were carried out.

Capital improvements (such as remodelling a bathroom, or adding a pergola) should also be claimed as capital works deductions.

Expenses of a capital nature may form part of the cost base of the property for capital gains tax purposes (but not generally to the extent that capital works deductions have been or can be claimed for them).

TR 97/23 - Repairs
4. In this Ruling, the expression 'initial repair' refers to a repair by a taxpayer that remedies some defect in property or makes good damage to, or deterioration of, property being a defect, damage or deterioration:
(a)existing when the property was acquired from another person (whether by purchase, lease or licence); and
(b)not arising from the operations of the taxpayer who incurs the repair expenditure.
 
5. A repair is not an 'initial repair' simply because it is the first repair made after property is acquired. It is an 'initial repair' if repair is due when the property is acquired in the sense that the property has defects, damage or deterioration or is not in good order and suitable for use in the way intended.
Initial repairs are of a capital nature and not deductible
 
59. Expenditure incurred on an initial repair after property is acquired, if the expenditure is incurred in remedying defects, damage or deterioration in existence at the date of acquisition, is capital expenditure and is not, therefore, deductible under section 25-10. This is so whether the property is purchased or obtained under lease or licence by the taxpayer. The cost of effecting an initial repair is still not deductible even if some income happens to be earned after acquisition but before the repair expenditure is incurred: but see paragraphs 63 to 66 of this Ruling in relation to dissecting or apportioning initial repair costs.
Ref: Ato
http://www.bdsaqs.com.au

Post has attachment
Wait while more posts are being loaded