Are you maximising the tax depreciation and capital allowance benefits for your investment property?
All types of income producing properties or investment properties have substantial taxation benefits available to be claimed as a tax credit. Many property investors are missing out on literally thousands of dollars in lost tax depreciation deductions.
Both new and old properties will attract some depreciation benefit that the owner is able to claim as a tax credit. A common myth is that older properties will attract no claim. Therefore it is worth making an enquiry about any property.
When a property owner has not been claiming deductions for tax depreciation, previous financial years tax returns can be amended. The Australian Taxation Office (ATO) allows for up to the previous two year returns to be amended, in some instances the ATO may have to pay you money back!
The depreciation benefit available depends greatly on the type of building, its age, use and fitout. Based on the Diminishing Value method of depreciation, the following scenarios are provided as an appropriate guide:
| Building Type | 2 BR Unit | Townhouse | Residential House |
| Purchase Price | $400,000 | $300,000 | $375,000 |
| Year 1 Depreciation | $12,000 | $7,000 | $8,000 |
| Year 1-5 Cumulative Depreciation | $50,000 | $30,000 | $32,000 |
Quantity surveyors are recognised by the Australian Taxation Office to be appropriately qualified to estimate building costs for the purpose of depreciation. Your accountant should recommend a specialist to complete such a report, to maximise your investment property tax deductions and depreciation benefits from your property.
Article Provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt) is a Director of BMT Tax Depreciation. Please contact us on 1300 728 726 or visit www.bmtqs.com.au for an Australia wide service.
