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  • The IRD and improvements

    Hi all

    If you are considered an investor, not a trader or developer by the IRD. Can you make capital improvements such as new fence, paint exterior and roof with the intention of increasing equity for future purchases?

    I wish to be classed as an investor, however I want to improve the value of my properties. Can I do this and is it claimable?

    Cheers

    Ironman

  • #2
    Not an accountant, but yes, my understanding is that you can make improvements to increase value and not be labelled a trader.

    What you can't do is claim improvements as an expense in the year that they occur - your depreciation schedule will need to be adjusted to take account of the improvements.

    What is maintenance and what is an improvement? - That's another one of those grey areas.

    Some things are obvious - adding a new fence is obviously an improvement. Replacing a 30 year old kitchen after the tenant has had a chip pan fire - who knows.

    Your accountant is the best one to ask for specifics.

    Hope this helps

    cube
    DFTBA

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