Table of contents
Is a building & pest inspection tax deductible? - featured image
Cropped Greg Hankinson.png
By Greg Hankinson
A A A

Is a building & pest inspection tax deductible?

The simple answer is NO, not in the way you're expecting. 

pencil icon

Note: When buying an income-producing investment property, the expenses associated with its purchase are treated differently from later repair, maintenance and ongoing management costs.

Many of the upfront costs are considered what we call a 'capital cost'.

These include stamp duty, conveyancing costs and building and pest inspections.

You cannot claim these costs as a tax deduction in the year they were incurred.

Instead, they get added to your cost base and essentially reduce your Capital Gain when (and if) you sell the property.

What if I don't buy the property?

If you pay for a building & pest inspection on a potential purchase that does not proceed, then there is no cost base to add it t,o which means this expense is not claimable.

Building And Pest Inspection Report

What if I run a property investment business?

Now this is a little different, but it really depends on what you mean by a "property investment business."

If you're in the business of purchasing long-term investment properties, then the conditions described above relate to you.

pencil icon

Note: On the other hand, if you are a property developer who sells stock at the end of the project, or somebody in the business of buying, selling and trading properties, then you should be able to claim the upfront costs of running your business, rather than making them capital costs.

There will also be many other tax reductions you can claim.

However, you will lose the 50% discount on the Capital Gains Tax when you sell a property, even if you hold it longer than 12 months.

Cropped Greg Hankinson.png
About Greg Hankinson Greg and his team have successfully built and renovated in excess of 500 homes throughout Melbourne and are showing no signs of slowing down anytime soon. Being a Gold member of the Housing Industry Association and National Kitchen and Bathrooms Association, Greg’s focus is on Continued Professional Development, not only for himself, but his team of industry experts.
6 comments

What about if the building inspection is part of an investment loan used to purchase a Land and build for investment purposes? I would like to know how “ building inspection” ordered to confirm that the building was practically completed and acc ...Read full version

1 reply

I would like to know building inspection done prior to purchase of the investment property is it part of purchase cost as Stampduty and solicitor Charges . How we treate the expenses incurred on preparing the Tax Depreciation schedule for investm ...Read full version

1 reply

Is the 0.25% cooling off penalty on termination of a contract to buy a residential investment property an income tax deduction, a capital loss or neither?

1 reply
3 more comments...

Guides

Copyright © 2025 Michael Yardney’s Property Investment Update Important Information
Content Marketing by GridConcepts