No doubt as property investors you’re currently preparing your tax return now that the financial year has come to a close.
It is the perfect time to consider a depreciation schedule and how it works into your cash flow.
While, increasingly, savvy investors are aware of depreciation and the benefits of it, many have still not attained the highest level of savings property, explains BMT Tax Depreciation managing director Brad Beer.
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“The average tax depreciation schedule saves an investor $10,100 in the first full financial year and $73,500 over 10 years of ownership, however recent research we conducted revealed that 80% of property investors may not be maximising the depreciation deductions available to them,” said Beer.
“With so many new property investors in the market, it’s as important as ever for Australians to familiarise themselves with tax depreciation schedules.”
Essentially, as buildings and its fixtures get older they decrease in value and they wear out. Tax depreciation schedules allow you to claim for this.
“Specialist quantity surveyors are able to make a comprehensive assessment of all the depreciable assets, not just the more frequently-claimed items such as carpet, hot water systems and light fittings,” he said.
“Less obvious items such as garbage bins, mechanical exhausts and door closers may seem insignificant by themselves, however cumulatively can make a significant difference to the cash flow generated by an investment property.”
Two years of “back claiming” can also be organised if investors haven’t yet claimed since purchase.
This article first appeared on Property Observer.