You may be
wondering what a "capital expense” is?
Well, when
you consider all the expenses involved in owning your investment property, tax
benefits don’t just include immediate tax deductions.
There are
also expenses that can be claimed as capital expenses.
When it
comes to stamp duty, you can’t claim a tax deduction for this expense.
But it will
form part of the cost base of the property for CGT purposes when you sell the
property.
Note: If you paid a stamp duty of $20,000
on a property purchase price of $500,000, then when it’s time to sell your
investment property, the ATO would treat the purchase as if it cost you
$520,000.
As for your
other capital expenses, depending on the value, you may be entitled to claim
them over a period of 5 years from the date you took out the loan for the
property.
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Jason Gwerder
Wednesday, 29 June 2022