Depreciation

What is Tax Depreciation?

As a building gets older and items within it wear out, they depreciate in value.

The ATO allows property investors to claim a deduction related to the building and plant and

equipment items contained within it. This deduction essentially reduces the investment property

owner’s taxable income – you pay less tax!

Depreciation Facts

• Your investment property does not have to be new – older properties also have good depreciation potential
• You can adjust previous years tax returns – go back and claim YOUR MONEY from the ATO!
• Fees are 100% tax deductible in the first full financial year claim, there will be no charge for the services. You can’t lose!

Tax Depreciation Reports

When a quantity surveyor completes an investor's capital allowance and tax depreciation claim, two main elements are taken into consideration;

• Capital Works Allowance (Division 43) and
• Plant and Equipment (Division 40).

Capital Works Allowance

The capital works allowance is a deduction available for thestructural element of a building including fixed irremovable assets; this is commonly referred to as the building write off.

 
Plant and Equipment

The plant and equipment element is a deduction available for removable assets which are identified through ATO legislation as assets which depreciate at a faster rate than the building. Each plant and equipment item has an effective life and the depreciation available on that item is calculated accordingly.

Renovating an investment property?

Prior to demolition or renovation, many investment property owners remain unaware that the old assets within their property can be worth thousands of dollars. When these old assets (like carpet and hot water systems) are replaced or ‘scrapped’, owners may be entitled to claim them as a tax deduction. Before you discard old items or demolish your investment property, check to make sure you aren’t throwing dollars away!

Older Properties

Depreciation on the structure of a building is governed by the date that construction began. This may mean that a property might not be eligible to claim depreciation on the original structure. However, investors will still be able to make a claim on the fixtures and fittings within the building. All eligible assets are valued at the time of settlement regardless of their age. Older properties that have had a renovation are also eligible to claim depreciation on the work completed, even if this work was carried out by a previous owner.

New Properties

Owners of new investment properties are eligible to claim depreciation on the building structure and the fixtures and fittings in their property. The effective life of a new building for Australian Taxation Office (ATO) purposes is 40 years (some exceptions apply). This means a brand new property is able to claim the entire construction cost over the life of the property.

Depreciation Differences

Buy Property Direct and BMT Tax Depreciation

BMT Tax Depreciation has been working with Buy Property Direct for a number of years to provide the most comprehensive tax depreciation services to their clients. BMT prides itself on maximising depreciation deductions for our clients and help them to get the most out of their investment property.

Every investment property you purchase through Buy Property Direct comes with a free BMT Tax Depreciation Report – which will provide you with thousands of dollars in deductions.

BMT was established in 1997 and has grown from strength to strength. They are leaders in their industry, having completed over 140,000 tax depreciation reports for investors Australia wide. This organic growth is the best demonstration of our commitment to our clients and alliances which will always remain our primary focus. We have offices in 11 locations around Australia, servicing every region.

Pay Less Tax - Save Thousands with a BMT Report

Almost 80% of property investors are missing out on thousands of dollars in depreciation

deductions from their investment property. Become part of the 20% that are putting more money

back in their pocket!

Contact us today This e-mail address is being protected from spambots. You need JavaScript enabled to view it  to discuss Depreciation Schedules and ensuring you have all the right information to get the best out of your portfolio.