Chief Executive Officer of BMT Tax Depreciation, Bradley Beer recently reported that about 80% of Australian property investors don’t claim property depreciation, signalling the need for Australian Property Managers to raise the issue with their clients and advise them of their best course of action.
Property investors, including those who own older properties, should seriously look into claiming property devaluation deductions for 5 major reasons:
1. Property investors who claim depreciation deductions benefit from boosted cash-flow, which can also help make attaining their next investment property more achievable, if they choose to continue investing.
2. Even though the Australian Tax Office (ATO) restricts property owners from requesting capital works deductions for residential real estate built before September 15th, 1987, there are numerous other deductions on offer for your investor clients.
Bradley Beer noted “Often investors who own older properties think it is not worth claiming or they are ineligible due to the age of their property. BMT Tax Depreciation usually finds an average of $4,042 in annual depreciation deductions for the owners of investment properties which were built prior to 1987”.
3. Property investors can claim depreciation deductions for building structures, plant, equipment and other assets. This rule applies to both older and new properties:
4. Any eligible property investor has up to 40 years to lodge a claim for capital works deductions:
5. Best of all, it is 100% tax deductible to put-together a depreciation schedule!
Investors should contact a Quantity Surveyor who is an expert in tax depreciation. They will come up with an organised depreciation schedule for the investment property owner. It is completely tax deductible to organise its creation and the property owner’s accountant will use the schedule come annual tax assessment time.