Why Property Depreciation Is Important and How to Claim It

Every year several Australian property investors lose out crucial tax depreciation benefits worth thousands of dollars. Actually, they fail to claim the valid property tax depreciations. Not claiming the property depreciations is like not charging rent to your tenants.

One of the major reasons why property investors don't have a tax depreciation report is simply because their accountant never asked them to get one. Maybe because even the accountant is unaware about it.

Property depreciation is a form of income that property investors can make from tax depreciation deductions. The Australian Taxation Office (ATO) allows investment or rental property owners to depreciate the value of their properties and claim the amounts as tax deductions against the income tax that they have to pay on the profit. Generally maximum property depreciation deductions can be achieved on new properties, although old properties are also eligible for significant tax depreciation benefits. But, the depreciations are incurred more on newer properties.

Therefore, when investing in property, you must prioritize on purchasing brand new properties which offer high levels of depreciation. And, we can utilize the property depreciation benefits to sustain the investment property while it grows older. As authorised by the ATO, depreciation schedules can only be obtained from registered quantity surveyors in Australia, while your accountant can be consulted for tax deductibility of the items included in the tax depreciation report.

Hence, it's recommended to all property investors to at least inquire whether or not their property is eligible for property depreciation deductions on their property!!

Get Your Depreciation Schedules Prepared By the Best in the Industry

Property Depreciation is a legislation that was introduced by the Australian Tax Office (ATO) in 1985 to encourage the real estate industry to construct more buildings in order to provide required rental accommodation for the increasing population in Australia. This legislation provides large property depreciation tax deductions for investors and owners of rental property in Australia. According to this rule the holding costs of the property asset are reduced significantly when a tax depreciation schedule is applied.

It means that just as you claim wear and tear on the purchased equipment or vehicles to generate income, you can also claim the depreciation for investment property or rental property against your taxable income. Claiming property depreciation on your investment or rental property is an entirely legal way of reducing the tax levied on your income-producing property in its current year.

As directed by the ATO, quantity surveyors are the only professionals, authorised to prepare tax depreciation schedules for rental or investment properties in Australia. Therefore, it is mandatory for investment property owners to appoint only ATO registered quantity surveyors to prepare a tax depreciation report. Moreover, the depreciation schedules must include the capital write down of construction cost on the investment property in accordance with the relevant ATO tax legislation.

So, if you are looking for an ATO registered expert quantity surveyor in Australia, then Property Returns can be your best choice. Property Returns is a leading quantity surveying firm that has 10 offices located in every major city and regional areas of Australia. They have an experienced and qualified team of quantity surveyors, registered Tax Agents, and property depreciation experts.

Tax Advantages Offered By the Rental Property Business

Rental property business is a growing sector!

People are realize that this is a great way to earn!!

Also, there are various favorable tax advantages that investors can benefit from!!!

As you might already know, a rental property is considered as an investment property and not a residential estate. Thus, the tax computation is also different. So, how does the property owner benefit from it?

You can offset your rental income by claiming the property depreciation of your investment property, and the appliances as well as mechanical systems it contains, because they age. This tax depreciation is not taken all at once, but calculated over time.

Since having a rental property is a business, the income generated from it will be treated as your gross income. Therefore, the expenses incurred, related to running the business shall be deducted. There are several expenses that can be deducted from the gross income, among those are cleaning and maintenance, the interest on mortgage, insurance, advertising for tenants and property depreciation.

Property depreciation is one of the most common tax advantages that you can benefit from. This is taken from the gross annual income, thus providing significant savings for the rental property owner.

Well, it’s not viable for everyone to prepare a tax depreciation report or depreciation schedules, because it requires proper knowledge and years of experience. Therefore, the Australian Tax Office (ATO) has authorised only certified and experienced Quantity Surveyors for preparing tax depreciation reports or depreciation schedules for both rental and investment properties.

So, if you own a rental or investment property in Australia, and are looking for a reputed Quantity Surveyor or Quantity Surveying firm that can prepare perfect depreciation schedules for you, look no further than Property Returns!!!