Granny flat deductions

Question from Zyreen updated on 22nd March 2019:

I would like to know whether if you build a granny flat and decide to rent it out after the completion of building the expenses related to council consent, power and water line (Vector) and architectural fee are deductible? Also, could you please confirm that the building expenses (payment to builder for materials and labour) are capital expenses and, therefore, not deductible.






Our expert Mark Withers responded:

All of the costs associated with the construction of the asset are capital costs including building, architectural and council consent fees. Holding costs like rates and interest are typically deductible through the construction phase.



Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.

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