Interesting tax breaks for savvy investors
By | 2nd May 17

Do you know what you can claim each year at tax time for your investment property? If the answer is no, we have some ways you might want to look into by the time June 30 comes around.

Understanding depreciation. What is depreciation?

Depreciation is the reduction of value of an asset over a period of time due to wear and tear. One of the main misconceptions with claiming depreciations on your property investment is that you need to spend money to claim it. You actually don’t. Claiming depreciation and capital works deductions associated with the property can be a significant tax benefit to you as an investor.

What is capital works allowance?

The ATO recognises that over time, a building will age and may need maintenance so the building can produce a “taxable income”. For residential properties you may be able to claim items in your investment such as clothes lines, driveways, door furniture hardware (handles), doors, fences to the property, sinks, baths, basins and taps.

What is plant and equipment? These are considered items that are easily removable from your property. Things like hot water systems, blinds, ceiling fans, security systems or air conditioning systems are examples of plant and equipment items that are likely to be replaced sooner under a capital works allowance.

So how do you claim depreciation? Initially you will need to enlist a quantity surveyor to draw up a capital works allowances and tax depreciation schedule. This report will outline the deductions available for both your plant and equipment and capital works.

What can I claim? The standard items include outdoor furniture, solar lights, wheelie bins, freestanding barbeques, spas, in ground swimming pools and sheds.

Unusual items that can be depreciated

If you require a tax depreciation scheduled, contact our office and we can provide you with a referral to a reputable company that can help you get more cash back into your pocket!

If you’re thinking of take the next step and investing, get in touch so we can take care of your exact property needs! Email: buyer@advantageproperty.com.au