Is buildings insurance a capital expense during the buying process?

Accounting
1

I have exchanged contracts on a property I am buying to rent out. I will become the legal owner in the next week or so. I have taken out buildings insurance from the day the contracts were exchanged. Will the insurance purchase be a capital expense at this stage and then a revenue expense at each renewal going forward?

I understand that the purchase price of a a fixed asset and any costs incurred to bring the asset to the location and condition needed for it to operate in the manner intended are capitalised.

2

Hello @mohsin986

It would be better to check this with your accountant to make sure it is recorded correctly as we are not registered accountants nor bookkeepers.

3

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