What is a capital expense and can you claim it at tax time?

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

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