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  1. #1

    Default Capital costs when buying or selling a rental property

    Does anyone know if the Rates adjustments on a legal settlement statement are considered costs of purchasing/selling and therefore capitalised.This is how a couple of accountants i spoke to treat it.
    The Rates while renting out the property are revenue expenses and therefore fully deductible.Are the Rates treated differently upon purchase/sale of the property.

  2. #2
    Join Date
    Apr 2010
    Location
    Auckland
    Posts
    307

    Default

    They are deductible

    The rates adjustment on the settlement statement are compensation to the vendor for prepayment of rates. It is the cost of rates from date of settlement until your next rates payment is due.
    NZ Tax fixed fee accounting, we are an online accounting practice. Our integration with Xero and our unique approach provides provides superior value to our clients.

  3. #3
    Join Date
    Jun 2004
    Posts
    10,364

    Default

    I have always just included it as an expense - but then I rent out straight away. Given that the rates you pay the vendor are for your share for the time that you will own the property (that they have paid in advance) then they are accruing while you rent the place out so are claimable.


 

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