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Rental Property tax deductions

Discussion in 'Accounting, Tax & Legal' started by lizzy1, 5th Sep, 2009.

  1. lizzy1

    lizzy1 New Member

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    melbourne
    Hi, I was hoping someone can help with my query on what decuctions I can claim relating to the purchase of a rental property. The expenses in question are conveyancing costs, stamp duty, transfer costs, and the Land Titles Office Charge. Also, does anyone know if setting up a mortgage attracts stamp duty, and how I would find this out.

    Thanks
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Most of the costs of purchasing a property are not directly deductible, instead they are added to the cost base so that when you sell, you pay slightly less capital gains tax.

    Mortgage costs are generally depreciated over 5 years I think.

    I think that most states have now abolished stamp duty on mortgages - you'll need to double check with the OSR for the state you are purchasing in.
     
  3. lizzy1

    lizzy1 New Member

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    Thanks Sim, so to clarify, are you saying the the Conveyancing Costs, Mortgage Discharge and Registration and the transfer cost generated by the Land Titles office should all be capitalised, and treated as part of the cost of the investment, as distinct from being deducted treated like borrowing costs, and deducted over 5 years?

    Any advise is much appreciated
    Lizzy
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Yes, that is exactly my understanding.