With the 2016-2017 financial year recently coming to an end, property investors may assume that they have missed their opportunity to organise a tax depreciation schedule and make a depreciation claim.
Research suggests around 80 per cent of property investors simply don’t claim because they are unaware of depreciation, they don’t know the rules or they don’t realise they’re eligible.
Legislation enforced by the Australian Taxation Office (ATO) allows investors to claim depreciation deductions on any income producing property for the wear and tear that occurs over time to the buildings structure (capital works deductions) and the plant and equipment assets contained.
Both new and older properties attract depreciation. Although the ATO restrict owners of older residential properties on claiming capital works for buildings in which construction commenced prior to the 15th of September 1987, depreciation of plant and equipment can be claimed for most buildings*. Property owners could also be entitled to claim deductions for any recent renovations or updates made.
A specialist Quantity Surveyor can prepare a tax depreciation schedule at any time of year. This schedule will begin from the property’s settlement date and outline depreciation deductions over the entire depreciable life of that property (forty years).
If an investor has not previously claimed or maximised the depreciation deductions available from their investment property they can go back and amend two previous tax returns.
*Under proposed changes to legislation, investors who exchange contracts on a second hand residential property after 7:30pm on 9th May 2017 will no longer be able to claim depreciation on plant and equipment assets. Investors who purchase a new property will be able to continue to claim these items as they were previously. We are currently speaking with government to further understand the intricacies relating to the proposed changes. To learn more simply visit www.bmtqs.com.au/budget-2017.
Investors who would like more information can contact one of the expert staff at BMT Tax Depreciation on 1300 728 726.
Article provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICSM, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia-wide service.