Jimand Janeown, as joint tenants, an investment property in Strathfield. They purchased the investment property in October 2015for $500,000. (They paid a 10% down payment and borrowed the balance of the purchase price from BigBank at market rates.) They also incurred legal fees, transfer (stamp) duty and other incidental costs in relation to the acquisition, of a total of $30,000.

After purchasing the property, Jimdis covered there was a pre-existing hole in the roof, which he had not noticed prior to purchase, as the inspection had been quite rushed. Jane was very annoyed when sheheard about this and told Jim that he should have negotiated a reduction in the purchase price of the property and now it was too late. Jim quickly arranged for a builder to fix the hole in the roof in order to bring the property upto market standards so that it could be rented out. Jimpaid the builder $12,000 for the work. Jimtold Janenot to worry about the expense as he was planning to claim a deduction for it in his next tax return. Since the roof was fixed, Jimand Jane have rented the investment property out to tenants at market rates.