With tax time approaching, Property Managers should be encouraging their investor clients to claim all available deductions for their investment properties, including property depreciation.
Depreciation is considered a non-cash deduction, meaning an investor doesn’t need to spend any money to be eligible to make a claim. Therefore, it’s not unusual for these deductions to get missed.
The Australian Taxation Office (ATO) allows owners of income-producing properties to claim depreciation deductions for the natural wear and tear that occurs to a building and its assets over time.
Depreciation deductions relating to the building’s structure can be claimed as a capital works (division 43). As a general rule, owners of residential homes in which construction commenced after the 15th of September 1987 and commercial properties in which construction commenced after 20th July 1982 are eligible to claim capital works deductions.
Plant and equipment assets refer to the easily removable fixtures and fittings within the building such as hot water systems, carpets and blinds. Deductions for these assets are based on the condition, quality and individual effective life of each item as set by the ATO.
Investors should engage a specialist Quantity Surveyor such as BMT Tax Depreciation to discuss the depreciation potential of any investment property they own or are planning to purchase.
BMT can provide a comprehensive depreciation schedule outlining the deductions investors are eligible to claim when completing their annual income tax return.
A BMT Tax Depreciation Schedule has a one-off cost which lasts the life of the property (forty years) and will ensure the owner claims their depreciation entitlements correctly. A depreciation schedule is also 100 per cent tax deductible.
For more information on how depreciation deductions can help your clients, speak with one of the expert team at BMT Tax Depreciation on 1300 728 726.
Article provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation.
Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia wide service.