Does this qualify?
This is probably one of the most commonly asked questions tax depreciation experts like ourselves get asked every day from investment property owners wanting to claim construction costs as a tax deduction.
Fortunately there are some construction costs you can claim but here are the four most common ones people try to claim which are not eligible.
- Demolition costs. Any cost involved in removing the existing structure to make way for a new property can't be claimed.
- Site clearing. General site clearing is not eligible but there are a few exceptions. Say you are excavating the site to build a new basement. Well you can claim this cost because it is considered part of the new basement.
- Landscaping. The general rule of thumb is if it grows you can't claim it. But there are many elements to landscaping and several things can be depreciated such as decks, fences and retaining walls.
- Developer's profit. Only the bottom line construction cost can be used when claiming depreciation, not the margin the developer or builder gave themselves on the project.
Do you have a construction cost question you want answered? Send us an email or call our team on 1300 99 06 12.