BMT for Property Developers
Depreciation Schedules for Property Investors
Maximise returns with a tax depreciation schedule
Claiming all the depreciation property investors are entitled to on an investment property can make a big difference to their cash flow. Of all the tax deductions available to property investors, depreciation is most often missed as investors do not need to spend money for it to be claimed. It is already there to be claimed on the building structure and on existing fittings and fixtures.
“Research shows that 80% of property investors are failing to take advantage of property depreciation and are missing out on thousands of dollars in their pockets,” said Bradley Beer, Managing Director of BMT Tax Depreciation.
What is depreciation?
As a building gets older, items wear out – they depreciate. The Australian Taxation Office (ATO) allows property owners to claim this depreciation as a deduction. Depreciation can be claimed by any property owner who obtains income from their property.
To maximise taxation returns owners of investment properties should organise a depreciation schedule upon settlement. A tax depreciation schedule is a document which helps the property owners’ accountant identify exactly how much depreciation can be claimed.
Why choose a quantity surveyor?
Investment property owners should contact a specialist quantity surveyor like BMT to prepare their tax depreciation schedule to ensure benefits are maximised. Quantity surveyors have specialised knowledge on what to claim to ensure nothing is missed and know how to maximise available returns for investors.
Quantity surveyors are one of the few professionals recognised to have the appropriate construction costing skills to estimate building costs for depreciation. Quantity surveyors are qualified under the tax ruling 97/25. They also have access to the latest information through their affiliations with industry regulating bodies.
A detailed tax depreciation schedule prepared by a quantity surveyor such as BMT Tax Depreciation should include:
- method statement
- detailed diminishing value, pooled items and prime cost schedules
- diminishing value and prime cost comparison tables and graphs
- capital allowances available
- forty year forecast
- evaluation of common property for strata or community title properties
- schedules based on the proportion of ownership for properties with more than one owner
A depreciation schedule for the life of your property
A depreciation schedule should be structured so your accountant can amend previous years’ tax returns to re-coup any unclaimed or missed depreciation benefits. It should be pro rata calculated for the first year of ownership based on the settlement date. A tax depreciation schedule should take into consideration whether there are multiple owners of the investment property and divide the benefits accordingly.
If you own an investment property, you need a depreciation schedule. A professional tax depreciation schedule will increase the cashflow of your investment property.
This report could be used as part of your overall assessment of the viability of your proposed investment. The report may also assist us in ensuring that your application for finance meets the NCCP guidelines in relation to our obligations for responsible lending.
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