Did you know about tax depreciation?
When a building gets older and items within it wear out, they depreciate in value. The Australian Taxation Office (ATO) governs legislation that allows owners of any income producing property to claim a tax deduction for this wear and tear.
A depreciation schedule could save you $1,000s on your next tax return.
A Depreciation Schedule ensures maximum property tax deductions
Investment properties are a great way to secure your financial future. As an Informed investor you’ll want to take advantage of all of the tax benefits that are available to residential property investors. Depreciation can be a huge tax deduction and many people that are less informed than you, forget to claim it. Who wants to pay more tax than they need to? To claim depreciation, you need a Depreciation Schedule.
What is a depreciation schedule?
It’s a document that lays out the exact amount of tax deductions for depreciation that you are entitled to claim. Your accountant will use it year after year to ensure you’re claiming the all the deductions that you’re entitled to.
A Depreciation Schedule runs for 20 years for once-off 100% tax deductible fee. Your annual tax deductions can help you cashflow your property. Don’t be one of those investors who fails to claim depreciation deductions.
While your accountant can prepare your tax return, they’re not qualified to prepare a tax depreciation schedule. That’s where we come in!
Our team can provide you with a comprehensive Depreciation Schedule that your accountant will love, and all of the information you need to know with regards to your tax deductions.
Would you like to have an idea of what your tax depreciation estimate could look like?
Try our free, easy-to-use, Tax Depreciation Calculator that helps you determine the estimate in a matter of minutes. Enter as much relevant information about the property that you can to receive your estimate. Click here now to access our online calculator for FREE!
To enquire or learn more about this service, contact your local consultant and get a free quote.
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Frequently asked questions
What is the difference between Depreciation Schedules on New vs. Old Homes?
If you’re buying a new home, you get to depreciate your house and the assets in it. If you purchase a used property, you can depreciate the building, but only assets that you install new yourself. Based on an average $250,000 home, you can claim around an extra $35,000 in deductions over 5 years on a home you purchased new, compared with a 1 Year old home.
This is why it is so beneficial to have a Depreciation Schedule done as soon as you purchase a newly built home. Waiting for even just one year could cost you 100os of dollars that you could have claimed back.
Buildings built after September 1987 depreciate at 2.5% per year, however the assets within a home depreciate in value much more quickly. Because the assets depreciate much faster than the building itself, it is important to have a depreciation schedule set up from the earliest point possible – to claim on those assets before their value quickly becomes minimal.
What if I’ve been renting my property out for a while already?
It’s very common for people to learn about depreciation well after they purchase their investment property. The good news is your Depreciation schedule can be backdated allowing you amend prior tax returns.
Are all Depreciation Schedules the same?
A good Depreciation Schedule will provide all the information your accountant needs in a format that’s easy for them to use so they’re not spending additional time on your tax return. The provider also needs to be up-to-date with all current rules, especially the changes in the 2017 Housing Tax Integrity Bill.
Are your Depreciation Schedules ATO compliant?
Experienced trained in-house staff and industry partners provide reliable, accurate, ATO-compliant depreciation reports in accordance with the latest government rulings & interpretations. They’re also designed to make your accountant’s job easy so your tax return can be quickly prepared and lodged without additional fees.
What’s involved and how long does it take?
Just provide some basic information about your property. Get an accurate, no-obligation quote. You’ll be asked for a couple of dates and a deposit to get the ball rolling. An inspection will be carried out and your Depreciation Schedule will arrive soon after that. If you need a rush job, please let us know.
What is included in a Depreciation Schedule?
Depreciation is available on the building itself and on the assets within your property. That’s things like the carpet, dishwasher, oven, etc. The items that are ‘easily removed’.
Buildings depreciate at 2.5% per year for 40 years from the original date of construction. The assets depreciate much more rapidly.
