It’s tax time – don’t forget to claim depreciation!
If you own an investment property, it is time to get your property depreciation schedule prepared, so that you can maximise your tax savings. Generally speaking there are two types of depreciation allowances available to investors being: Capital Works and Plant & Equipment.
CAPITAL WORKS: You can claim a capital works deductions for the construction costs of buildings (built after 1985), extensions, alterations (including kitchen and bathroom renovations) or structural improvements such as a gazebo, carport or retaining wall. Capital works are usually depreciated at a rate of 2.5 per cent over 40 years.
PLANT & EQUIPMENT: P&E are depreciating assets which deteriorate more quickly such as an oven, dishwasher, dryer, air-conditioning unit, carpet or blinds. You can claim a deduction based upon the effective life of each item.
Did you know:
• 52 percent of investors do not fully maximise their tax entitlements.
• You are legally entitled to claim the depreciation of your investment property against your taxable income.
• All properties will attract depreciation deductions if purchased before May 2017 – new property and previously owned property qualify.
• If you have purchased a property after May 2017, then only the new property would qualify.
• If you have not been claiming or maximising your entitlements you can backdate your tax return up to two years!
• The cost of the Tax Depreciation Schedule is 100% Tax deductable.
How long it will take?
Independent Tax Depreciation guarantees to complete your schedule within 72 hours of receiving all the correct information and payment.
What do I do with the depreciation schedule report?
Simply hand it to your accountant at tax time and they will include it with your income tax return.
An amendment to the Tax Agents Bill dated 1st March 2010 state, it is imperative that a Tax Depreciation Schedule is prepared by a suitably qualified Quantity Surveyor only, like the ones we use. Or you schedule may not withstand an ATO Audit.
If you would like further information we recommend you call your local Independent Property Inspector, David on 0410 358 703