Issue of tax deductions needs an expert’s advice

QI am in settlement on an existing villa as a first home buyer in Western Australia, using all the grants and tax incentives available.

I intend for it to be my primary residence, but it is tenanted for a fixed term for four more months.

Am I able to use the time it is being rented out to complete maintenance (for example, repairing ceiling cracks, replacing damaged security screens) and use that to negative gear or neutral gear the property until the current tenancy ends?

Or will doing that void my first home buyer stamp duty exemption and so on, and am I better off waiting until I can actually move in?

This is not my preferred strategy, Caitlin, but I am bailing out of this one. Specialised investment property tax advice is well outside my area of expertise.

What I can tell you is that providing that it is a repair, it will generally be tax deductible for an investment property, but even this is not simple. For example, retiling a bathroom is likely to be seen as a capital improvement and eligible for a capital works deduction of 2.5%pa. A new light fitting is likely to be plant and equipment and deductible over its effective life. Repair a crack in the plaster and this is restoring a damaged asset and immediately deductible.

This is all hard enough and needs advice from an expert tax adviser. But what I am really concerned about is your intent.

You make it clear you intend to make this your home, so on that basis I wonder about tax deductibility at all. Here I can give you clear advice: go straight to a tax expert with deep knowledge of rental property and have a good conversation with them about what is deductible and on what basis, in particular given that your intention is for the property to become your home.