Tax depreciation Sunshine Coast Quantity Serveryors
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Sunshine Coast Tax Depreciation
ACCORD Quantity Surveyors

Investment House Buderim Sunshine Coast

Tax depreciation investment property Buderim

The sad reality of life is that you can’t make money without having to pay taxes, but the good news for property investors is that there are tax deductions that can cushion the blow a bit. One of the biggest of these deductions is for tax depreciation, as it is understood that every Buderim property will need work done and items replaced over the years. These are all things that depreciate over time, which is why investment property owners can catch a break on the income they make from their properties.

It should be noted, though, that investing in a property for the sole purpose of getting tax breaks is never a good idea. It should be more about creating a new source of income, and perhaps even improving the area in which your property exists. People who get into the business for the latter reasons are often unaware of their tax depreciation rights, or they may believe certain myths about it that are out there. Let’s debunk some of the more common of those.

Many investment property owners are under the impression that they can calculate all the depreciation costs on their own. It may seem straightforward enough, but one or two mistakes can end up costing thousands of dollars. The Australian Tax Office (ATO) strongly suggests that only a licensed quantity surveyor should be used to estimate the depreciation for each item on a property. As well as getting what is owed, the property investor also protects themselves in the event of an audit.

Buderim investment shopIt may come as a surprise to learn that tax depreciation is not just for new properties. A house in Buderim built before 1985 is still as open to depreciation as one built last year. The reason for this myth being perpetuated is due to the building allowance on residential properties cannot be claimed on building built prior to July 18, 1995. All that means is that depreciation on the structure of the building cannot be claimed, but other areas most certainly can be.

Contrary to popular belief, not all tax depreciation reports are the same, which is another reason why a professional quantity surveyor should be call in for the job. A company that takes the time to go over every detail in a property can potentially add thousands of dollars to the amount that can be claimed for depreciation. An in-depth report can make a huge difference to a property investor come tax time.

Another common myth believed by many property investors is that they cannot claim depreciation on works done by the previous owner of the property. It’s not just visible renovations and upgrades that can be claimed, as things such as plumbing and new electrical work are also open to depreciation. Most property owners will not be privy to the amounts paid by the previous owner to have that work done, but the ATO gladly accepts that a property surveyor can properly estimate said costs and come to a depreciation amount that is both fair and acceptable.