You don’t need to wait for the end of the financial year (EOFY), for investment property owners to start thinking about possible tax deductions from property depreciation on the properties that they own. While many investors and homeowners already know about the cost of building a house Sunshine Coast, they may not be so up to speed on what the Australian Tax Office will recognise in terms of depreciation claims. This is something that should be learned as soon as possible, as it can often be the difference between properties turning a profit and taking a loss in Wurtulla, Bokarina, Birtinya, and other parts of the Sunshine Coast.
Since depreciation is considered a non-cash deduction, it is a real mistake to not include it in your annual tax returns. As an investor, you should know that you are in fact able to claim two different types of property depreciation, and it’s important to know the difference between them both. The first of the two is known as capital works, and is essentially based on the costs of construction of the property, as well as the fixed assets within. The second type is often referred to as plant and equipment, and is usually in reference to items that can easily be removed from the property. It can be tricky to differentiate between the two at times, which is why help from a tax professional is always a good idea.
Another claim that investors can make for their properties is investment property depreciation, but only if it’s a building constructed after 1985. This is a good one for investors looking at building a new property, as they can make this claim for a period of 40 years, with the depreciation rate usually coming in at about 2.5% annually. This is a huge amount, and can actually end up being as much as 60% of the actual purchase price of the property. Keep in mind that the 40 years is based on the age of the building. If it’s 15 years old at time of purchase, you can claim this depreciation for 25 years.
Property depreciation can be a tricky thing to figure out, which is why investors really need to think about talking to a ta depreciation company that will be able to help them get all that they are due from their properties. This is not a small investment to make, but one that should be considered absolutely crucial. You need only have your tax schedule created once, and the cost of having it done is actually tax deductible. This money really is an investment, as opposed to an expense.
Conservative estimates say that about 80% of all property investors do not make the sort of depreciation claims that allow them to recoup all the money that they are entitled to. If you fall into that category, you need to get your EOFY off to the right start by talking to a tax depreciation specialist today.
For Property Depreciation and Tax Allowances on investment properties please complete the information worksheet relevant to your property type. Submit online or print and fax.
Our fees are tax deductible as an expense and a receipt is included with your report.