There are lots of property related tax deductions that all investors claim: council rates, water rates, property management fees, repairs. But depreciation is one that many people don’t even know about.
Think of it as compensation for wear and tear. As buildings suffer wear and tear, so do their contents. If you are renting out a property, you can claim this as a tax deduction. To claim depreciation, you need a Quantity Surveyor to put together a document called a Depreciation Schedule. It sets out how much you can claim every year as a deduction.
Depending on when your property was built, the Quantity Surveyor will estimate the construction cost at the time it was built and they will put a value on it. You can claim this at 2.5% per year. You can even claim depreciation on renovations done by a previous owner.
If you bought the property before 9 May 2017, you will also be able to claim depreciation on the assets: appliances, carpet, air con etc. that were in the property at purchase. On a recently built property, the tax deduction for depreciation can easily be around $8,000 per year, so in many case it could be an investor’s biggest property related tax deduction – what a pity that so many people forget to claim it!
There is a company that we know and trust called Depreciator. They have done tens of thousands of Depreciation Schedules and will be able to tell you over the phone how much depreciation might be in your property and how much their 100% tax deductible fee will be.
You can call them on 1300 660033, or send an enquiry by clicking on the link below:
General advice disclaimer
General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.