What Is Property Depreciation?

There are two types of allowances available: Depreciation on Plant and Equipment and Depreciation on Building Allowance. Plant and Equipment refers to items within the building like ovens, cialis dishwashers, buy carpet and blinds etc. Building Allowance refers to construction costs of the building itself, such as concrete and brickwork. Both these costs can be offset against your assessable income.

So How Does A Depreciation Schedule Help Me?

A depreciation schedule will help you pay less tax. The amount the depreciation schedule says you claim effectively reduces your taxable income. Depreciation is known as a “non-cash deduction” because it’s the ONLY deduction that you don’t have to pay for on an ongoing basis – the deductions are in-built within the purchase price of your property. All other deductions, such as interest levies, will hurt your hip pocket on an ongoing basis.

Is My Property Too Old To Claim Depreciation?

The simple answer is no.

Shouldn’t My Accountant Prepare This Report?

If your residential property was built after 1985 your accountant is not allowed to estimate the construction costs. Chief Executive Officer of the Australian Institute of Quantity Surveyors (AIQS), Terry Aulich, advises that whereas accountants can offer advice around other aspects of tax depreciation, construction costs and property depreciation are highly technical domains in their own right.

Will You Need To Inspect My Property?

The Australian Institute of Quantity Surveyors (AIQS) Code of Practice stipulates that site inspections are necessary to satisfy ATO requirements.

A trained Quantity Surveyor will ensure all depreciable items are noted and photographed. This guarantees you won’t miss out on any deductions. The documentation can then be used as evidence in the event of an audit.

My Property Is Renovated. Can I Still Claim?

Yes. We will need to know how much you spent on renovations. This is an ATO obligation. If the previous owner completed the renovations you are STILL entitled to claim depreciation. In either case, where the cost of renovation is unknown, a Quantity Surveyor has been identified by the ATO as appropriately qualified to make that estimation.

How Much Will I Save?

Each property is different and many varying factors must be considered when preparing a property depreciation schedule. There are several depreciation calculators on the market.

How Long Will It Take To Complete My Schedule?

Your depreciation schedule will take approximately 2-3 weeks to complete, as long as the Quantity Surveyor can inspect your property without delay.

I Bought My Property 3 Years Ago. Can I Still Make A Claim?

Yes you can. Your accountant can amend your previous tax returns up to two years back. There are some exceptions, so contact your tax agent or the ATO for clarification.

 

*Source – www.realestate.com.au

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