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Registered valuation as tax deductible?

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  • Registered valuation as tax deductible?

    Hi,Is the RV tax deductible or not?My accountant says it's not but my friend's accountant says it is.This RV has been required by the bank for the pre-approval of loan which I have requested (the loan) to purchase an investment property in an auction.Cheers

  • #2
    Hi ak22,

    It depends what the valuation is used for. If it is relating to a mortgage (such as your requirement by the bank) then it is deductible.

    If not related to a mortgage or not required for a mortgage, then will be a cost of buying and not deductible.

    Book a free chat here
    Ross Barnett - Property Accountant


    • #3
      Thanks Rosco! Maybe I should tell my accountant it's required by the bank (as required for the mortgage approval). Will see how he goes with that. Otherwise, maybe time to change accountant. CHeers


      • #4
        As Ross has said, if it's required as part of your borrowing, which it looks like it is, it's deductible. If your accountant still argues, point him to Section DB5 of the Income Tax Act.

        It's pretty obvious you're ok in this instance.

        DB 5Transaction costs: borrowing money for use as capital

        • Deduction

          (1)A person is allowed a deduction for expenditure incurred in borrowing money that is used as capital in deriving their income.

          Link with subpart DA

          (2)This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply.
        AAT Accounting Services - Property Specialist - [email protected]
        Fixed price fees and quick knowledgeable service for property investors & traders!


        • #5
          Thanks much Anthonyacat.

          Another question: If for instance you've done all the RV as required by bank to get the pre-approval and didn't win the auction intended for that pre-approved loan and RV, can this RV still be claimed under your company? Cheers.