When does an IP legally stop being an IP?

Silence · 17th Apr, 2014

Hey all

I'm planning on moving into one of my investment properties around the end of the year and I was wondering when this property legally stops being an investment?

There will be a gap of a month or so between the tenants leaving and me moving in while I do some minor renovations and painting and I'd like to be able to claim this work thought the investment....

More importantly I just need to know when I can officially no longer class the property as an investment?

Cheers

Propertunity · 17th Apr, 2014

Silence said:
... I just need to know when I can officially no longer class the property as an investment?

When the property ceases to be rented out to tenants or be "available for rent" (which it won't be while you reno with the intention of moving in yourself).

jrc · 17th Apr, 2014

Silence said:
Hey all

I'm planning on moving into one of my investment properties around the end of the year and I was wondering when this property legally stops being an investment?

There will be a gap of a month or so between the tenants leaving and me moving in while I do some minor renovations and painting and I'd like to be able to claim this work thought the investment....

More importantly I just need to know when I can officially no longer class the property as an investment?

Cheers

As you will receive some rent in the 2014/15 year some of the repairs after your tenants vacate may be able to be claimed.
However. as the property will not be available for rent after your tenants vacate interest, rates etc would no longer be deductible.

Terry_w · 17th Apr, 2014

Silence said:
More importantly I just need to know when I can officially no longer class the property as an investment?

Cheers

For tax reasons? When it is not generating income or when it is no longer available for rent and tenants are not being sought.

datto · 17th Apr, 2014

"when I can officially no longer class the property as an investment?"

When you stand in the back yard, face north, raise your arms and yell out "I hereby declare this place my PPOR" (and ignore stares from the neighbours lol)

pinkboy · 17th Apr, 2014

Generally when the tenants move out.

Usually after you are most of the way through the final part of the Reno and you look sround and have more KFC wrappers to clean up than building scrap!

Or is that just me?

pinkboy

JacM · 18th Apr, 2014

The others are correct in what they've said.

For the sake of referring you specifically to what the ATO has to say about it, their website states the following in regards to residential rental property:

"To claim deductions for expenses, your property must include a dwelling that is rented or available for rent - for example, advertised for rent. If you are building a rental dwelling, you can claim deductions for the land while you are building."

http://www.ato.gov.au/General/Prope...e-year-incurred/?anchor=P726_53339#P726_53339

Dazz · 18th Apr, 2014

Six months before you decided to step out of the shadows with your first post. I can see why you called yourself Silence.....

Silence said:
I just need to know when I can officially no longer class the property as an investment?

You're not authorised to officially class or declare anything.

As others above have noted, the ATO is authorised to define these things applicable for all Australian taxpayers.

The way you've described your particular situation, I'd hazard a guess that the cost of the works you are planning to perform are not deductible on your tax return, due mainly to the timing.

Why not ask your accountant ??

Silence · 18th Apr, 2014

Thank you so much for you're replies everyone.... It is very much appreciated

datto · 18th Apr, 2014

silence, I just had a more thorough read of your post. Look, my opinion, I agree with others, as soon as your property is not available for rent then it ceases to be an investment property.

Now, again this is my opinion, if the IP is vacated by the tenants on say 30/4/14 and it is still available for rent (and you can prove it is) then those repairs you intend to carry out are tax deductable.

But I'd be very wary of claiming those repairs as a deduction because you have already stated your intention of moving in and not leasing the IP out again!

When does an IP legally stop being an IP?

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