With the end of financial year just around the corner, now is the time to revisit the tax advantages of owning an investment property. This includes arranging to have a tax depreciation schedule completed on your investment property.

Why is it important to have a tax depreciation schedule completed?

The preparation of a tax depreciation schedule by a qualified quantity surveyor will maximise the tax deductions available to you. Most importantly, your property does not have to be new to gain the benefits that a tax depreciation schedule can give you.

Understand what you are entitled to

Over time, items in your property begin to wear out and depreciate in value. The ATO allows property investors to claim tax back for depreciation through wear and tear. The same is true for the structure of the building. Like a property’s interior, buildings also wear out over time. The loss you are entitled to claim for this is called ‘building write off’.

Many plant and equipment items within an investment property may be depreciated over their effective lives.

Such items include:

  • Hot water systems and smoke alarms
  • Floor coverings, blinds and curtains
  • Ovens, cook tops and range hoods
  • Light fittings, ceiling fans and air conditioners, and
  • Clothes dryers and dishwashers.

There are many other property-related expenses that you may be entitled to claim in addition to depreciation. Such deductible expenses include interest, accounting fees, repairs and maintenance costs, borrowing costs, management fees, legal and accounting fees, insurance, mortgage insurance, rates and capital deductions.

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