Only 20% of Commercial Property Owners are claiming their full entitlement to depreciation in their tax returns.
You could potentially be missing out on thousands of dollars in tax deductions each year.
Commercial Property Investors are in the business of making money and as with every business, the Australian Taxation Office allows you to claim depreciation on Commercial Property as a tax deduction.
Depreciation is the accounting method used for calculating the loss in value of a building and the plant and equipment as it deteriorates over time. With a Tax Depreciation Schedule, you can claim that loss as a deduction in your tax return every year until the cost of the asset is fully written off.
The vast majority of Commercial Property Owners are not aware of the tax advantages that claiming depreciation brings, and how it can improve their overall Return on Investment.
If you have owned the property for several years, a Tax Depreciation Schedule may even be retrospectively applied, possibly allowing your accountant to amend up to two previous tax returns, resulting in an immediate rebate from the ATO.
Tax Depreciation is not just limited to the construction cost of a building, it also includes Plant & Equipment such as:
|Fire Services||Car Parks||Machinery|
|Common Areas||Office Fit-Outs||Kitchenettes|
Understanding the benefits of Tax Depreciation can increase your Return on Investment.
Below are some examples of typical deductions we’ve found for our clients:
|Property Type||Commercial Unit||Office/Warehouse||Office & Fitout||Industrial Warehouse|
|Property Description||Warehouse (tilt-up with mezzanine)||Office (two floors) and warehouse||Professional Services Office||Office (two levels) and three warehouses|
|Year Built||2016||2007||2004||1987, 1988, 1995, 2004|
|Deductions (first year)||$7,147||$19,118||$20,061||$36,165|
*Based on a Business Tax Rate of 30%