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Do I need to pay tax on my rental property in Australia?
If you are a foreign resident (for tax purposes), the Australian government can tax any income you make that is sourced in Australia. This includes rental income from an Australian investment property, as well as profits when a property is sold.
Foreign investors are not taxed on the total rent they receive, they only have to pay tax on their net rental income.
This is the total rent received, minus any rental deductions.
Deductible expenses include;
Depreciation
Interest
Strata
Management Fees
Rates
Water
Most of these items can simply be deducted by your Accountant, however claiming Depreciation requires the assistance of a qualified Quantity Surveying firm.
How do I claim Depreciation on my Australian rental property?
Depreciation represents the loss in value in a building over time. This loss in value can only be determined by a qualified Quantity Surveyor, and is compiled in a document called a Tax Depreciation Schedule.
Asset Reports is a Quantity Surveying company – we are qualified to prepare Depreciation Schedules for Australian investment properties.
Our Depreciation Schedules cost a one-off tax-deductible fee and last throughout the life of the property – up to forty years. Once completed, you simply provide the Schedule to you accountant and they apply your deductions each financial year.
I’ve owned my investment property for many years without a Depreciation Schedule in place, is it too late to start claiming Depreciation?
Not at all! A Depreciation Schedule can be used to amend up to two previous tax returns to recoup missing deductions. Now is the best time to order your Schedule – if you pay before June 30, you can claim the fee as a deduction in the current financial year.
My investment property is a small apartment, surely there won’t be much to deduct?
Owners of apartments are able to claim Depreciation on a portion of the Strata Common Areas. This can include:
Bricks & mortar
Carpets & flooring
Toilets & showers
Air conditioning & solar panels
White goods
Electrical appliances
Door handles & garbage bins
Pools & pergolas
Strata common areas
How does it work?
We conduct a thorough site inspection to assess the structure, fittings and furnishings at the property.
Our qualified quantity surveyors produce the schedule detailing your deductions for up to 40 years.
Your accountant applies these deductions to your annual tax return throughout the life of your property.
Having a Depreciation Schedule in place is an essential part of any Investment Property strategy, ensuring that you maximise the financial return of your investment.
STANDARD RESIDENTIAL – $595 (inc gst)
If you would like to speak to someone about whether a Depreciation Schedule could benefit your Investment Property strategy, please call our international phone number below. We can speak to you in either English or Mandarin.
