Residential Investors

Only 20% of property investors are claiming their full entitlement to depreciation in their tax returns.

Are you missing out on thousands of dollars in tax deductions this year?

Property investors are in the business of making money and as with every business the Australian Taxation Office allows you to claim depreciation as a tax deduction.

Depreciation is the accounting method used for calculating the loss in value of a building and it fixtures & fittings as the property gets older.

With a Tax Depreciation Schedule, you can claim that loss on rental properties as a deduction in your tax return every year until the cost of the asset is fully written off.

This is how it works now…

Anyone who buys an established property after the 9th of May 2017 for investment purposes will no longer be able to claim depreciation on the Plant & Equipment (fixtures & fittings) for that property. It is designed to prevent double dipping by all successive owners of the property claiming depreciation on the same pieces of Plant & Equipment. Existing owners who have leased their property before 1st July 2017, brand new properties, commercial premises and Plant & Equipment purchased by the investor are exempt.

For new investors entering the market buying established properties, there are still significant deductions available on the construction cost (Capital Works) of the property to claim. However, changes will not affect people who already own rental properties before the 1st of July 2017. So now is a good time to ensure all eligible property owners have a Tax Depreciation Schedule in place to take advantage of all the tax deductions they are entitled to.

By estimating the value of each item, the investor who purchased before 9 May 2017 (or who buys/builds a brand new property) can claim $2,816 in this kitchen in the first full year alone. But depreciation is not just limited to the kitchen, it applies to every room of the house plus the outside areas. For strata properties, your portion of the common area can also be claimed including pools, gyms, lifts and car parks.

No matter when you purchased the property, a Tax Depreciation Schedule could save you thousands of dollars each year in tax. Your accountant may even be able to amend your previous two tax returns if you have not claimed it in the past.

What Type of Investor are you?