One big perks of owning an investment property is claiming depreciation, which is the assessed annual decline in the value of fixtures, fittings, and buildings, which you can claim as a tax deduction to reduce your taxable income.
Surprisingly, many property investors are missing out on major tax deductions that can save them so much money in claiming this depreciation.
Claiming depreciation is a great way of minimising your tax, to maximise your cash flow return. This is one of the most under utilised claims available to property investors.
Generally, there are two types of depreciation available for property investors, depreciation on building allowance and depreciation on plant & equipment.
Commonly known as a building write off, building allowance is the deduction on the building structure. On the other hand, plant and equipment is the deduction for removable items within the building itself, such as tools and equipment.
A depreciation schedule includes the breakdown of all building allowance costs, plant and equipment costs, the rates and effective lifespan estimate for each item, and a breakdown of how much you can claim at the end of the financial year.
There are two methods of a good report, diminishing value method and cost value method, so it gives you different options for claiming depreciation on your assets.
The cost in preparing your depreciation report varies depending on the type of property, it's location, size, and all other factors.
Tons of notable quantity surveying companies offer a money-back guarantee, so you have nothing to lose and possibly thousands to gain!
Still have more questions in claiming depreciation? Book a Zoom meeting so we can chat!
Rachael Bland – Founder & CEO