What if you’re contemplating that
art deco meets Moroccan bathroom reno?
No doubt, remodeling a space is
a sure-fire way to attract a rental crowd and increase its value to potential
tenants – and it can be especially rewarding if you one day decide to put the
home on the market for sale.
But since such work is
recognisable by the ATO as an ‘improvement’, renovations of this nature and
scale won’t be immediately claimable in your yearly tax lodgement.
According to the ATO, an
improvement is classified as work that "provides something new, generally
furthers the income-producing ability or expected life of the property,
generally changes the character of the item you have improved, and goes beyond
just restoring the efficient functioning of the property”.
Therefore, there is a boundary
between what can be immediately claimed and what can’t be, in terms of the work
you do to an investment or rental property.
On some occasions, it’s a thinner
line, especially when a rental owner approaches a job with the best intention
to carry out maintenance work or execute a simple repair, but the job at hand
unintentionally wanders beyond that.
So, how can you predict whether
you’re about to cross that line?
RealRenta has all the tools that a property manager
has, but at over ¼ the cost of a property manager.
Join now and the cost is less than a cup of coffee a
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Friday, 25 June 2021