Property Investors don’t claim enough depreciation. According to Bradley Beer, chief executive at BMT Tax Depreciation, you could be saving big money when it comes to your rental property. He believes that up to 80% of his clients are not maximisingtheir deductions.
Based on the above stats, there’s a high chance that if you own an investment property in Australia, you could increase your refunds at tax time.
How do I ensure I’m claiming enough depreciation on my investment property?
It’s important to correctly categorise claimable items. Simple things like floating timber floors depreciate because they are a removable item. This means they can be claimed over a shorter period of time than floorboards.
Other items to keep in mind when claiming depreciation include:
– Property Insurances including building, contents, landlord, public liability or private mortgage insurance.
– Pest Control
– Land Tax and Council Rates
– Property Management Fees
However, you should be able to meet with your accountant to discuss your options specific to you in detail.
What can I do if I missed out on the past 2 years?
The good news is you can easily amend the last two years of tax returns you have lodged.
“If you’ve owned the property four years and claimed incorrectly you can’t go back four years, but you can do two,” says Bradley.
If you bought your investment property off the plan, you should have received a depreciation schedule prepared by a property valuer. This report will allow you to claim depreciation of the property and the fixed contents such as;
If you have an investment property and don’t already have a report, book one in with a quantity surveyor.
When discussing your investment depreciation options with your accountant, there are two considerations.
1. The building cost (around 2.5% depreciation each year)
– this involves getting a quantity surveyor to do an assessment and provide the amount available for a deduction.
2. Furniture and Fixtures
– The other is the nature of furniture, fixtures, appliances, kitchens, bathrooms, washing machine, dryer, curtains, carpet and built-ins that also follow a depreciation schedule, which can be found on the tax office website.
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