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Allowability of Capital Cost of Residential Property

id : 35   cat : Capital Allowances   
Morning, is the cost of construction of a residential rental property allowable on an individual? How is it apportioned i.e. for tax purposes?
Asked by : David Ngatho
 DOQ : 2016-05-30 21:00:00
   David Ngatho

Answer

CAPEX on Residential property is NOT an allowable tax exp. However if the owner leaves in the house purchased or improved by a bank loan, 150k max is allowable as interest exp. Here is the twist. CAPEX Rental Property. If CAPEX is used to renovate a rental property in order to maintain the level of rent that expenditure is allowable as an expense.
Answered by : John Muiruri
 DOA : 2016-05-31
   John Muiruri

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