Investment property owners often miss out on thousands of dollars due to two main reasons:
- They don’t know what depreciation entitlements they can claim for renovations or refurbishments to their investment property
- They don’t use a qualified Quantity Surveyor to prepare a tax depreciation schedule
Follow the steps below to ensure your tax depreciation schedule is right the first time around.
Understand scrapping
Scrapping refers to the removal and disposal of any potentially depreciable asset from an investment property. When worn or old assets (like carpet and hot water systems) are replaced and scrapped, the owner of the property may be entitled to claim the remaining depreciable value for the items being removed as a tax deduction in that financial year.
Get a “before renovation” tax depreciation schedule
Arranging a tax depreciation schedule before completing renovations will save you time and money when making a claim. In case of an audit by the Australian Taxation Office (ATO), a valuation of all items in a property, as well as adequate photographic records is required.
Get an “after renovation” tax depreciation schedule
A second schedule is prepared after completion of the renovation, identifying the value of all new plant and equipment and capital expenditure within the property. The adjustments will be made to your tax depreciation schedule for a small adjustment fee and should not cost you as much as the initial tax depreciation schedule. The new schedule will outline all the depreciation claims available for the life of the property (forty years).
Only deal with a credible provider of tax depreciation schedules
Established in 1997, BMT Tax Depreciation is a leading provider of ATO compliant and comprehensive tax depreciation schedules. The qualified team at BMT meticulously prepare and customise each and every depreciation schedule, ensuring that owners maximise the deductions they are entitled to.
Scrapping is a complicated process that requires the expertise of a specialist Quantity Surveyor in conjunction with an Accountant. By requesting a tax depreciation schedule you know you’re not going to miss out on anything and your Accountant will love you for it.
To find out more about property depreciation, visit the BMT Tax Depreciation property investor page here or contact one of our expert staff for obligation free advice on 1300 728 726.
Article provided by BMT Tax Depreciation. Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit http://www.bmtqs.com.au/ for an Australia-wide service.
Whilst the Information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact on the accuracy of the Information. The Information may change without notice and BTACS is not in any way liable for the accuracy of any information printed and stored or in any way interpreted and used by a user. Always check with ATO on www.ato.gov.au for the latest changes on tax law.
