Rent and taxation


Registered User
Hi everyone, we currently own and live in an apartment and we are buying a house that needs some renovation. Nothing too major: wiring, some plumbing, renew one of the bathrooms, and damp in treatment in the basement. Few weeks worth of work. The house will be our main residence and we plan to rent the apartment once we move in. Since landlords can deduct the expenses associated with improving a property, we are thinking about renting the new house while we carry the works and then once the works are done we move into the house and tenants move to the apartment. We have friends that would do that at a discounted rate for the house. Both properties are located in rent pressure zones.

1. Are we allowed to do that? i.e. lease our house for a short period of time while the works take place so we can claim rent expense deductions and then move in?
2. Does it make sense to do that from the tax point of view?

Not sure if more context is provided to answer this question, let me know and I can provide. Thanks!


Frequent Poster
Short answer, you can’t legitimately do what you’re proposing.

You’ve paid a price for the new house that reflects the work needed on it. The spending on the renovations are improvements to the property, or *********** expenditure in tax parlance - they are part of the cost of your asset, not current expenditure in the way a repair would be.

Tax stuff aside, you’d probably be in breach of other requirements by letting a property that is effectively a building site and not really suitable for occupation, to a tenant.