We know how time can fly!
While you might consider February a little early in the year to be thinking about tax time…
It may in fact be a good time to get your head around issues like depreciation and tax breaks, and your accountant may appreciate your questions at a time when he or she is not frantically caught up in paperwork.
It is so important to claim all the relevant deductions available to you.
Property related expenses that may be claimed at tax time include:
Body corporate fees
Repairs and maintenance
Property depreciation/capital allowance deductions
Many investors are unsure about whether it is worthwhile getting a depreciation report because of the age of the property. Every owner of an investment property, new or old, commercial or residential, should be claiming their maximum depreciation entitlements.
As a property gets older, items within it wear out. They depreciate in value and the ATO allows any owner of an income producing property to claim tax back for this depreciation. The same goes for a building’s structure. It wears out over time and therefore that loss can be claimed. This is commonly called building write-off.
In the case of older properties a capital allowance and tax depreciation report covers not only the capital works allowance but depreciation of plant and equipment as well.
Many plant and equipment items within a property are able to be depreciated over their effective lives. Some of these include hot water services, ceiling fans, carpet, vinyl, blinds, exhaust fans, washing machines, cook tops, ovens, floating timber floors, range hoods, smoke alarms, air conditioners, light shades, microwaves, furniture packages, clothes dryers, freestanding spas, curtains and security systems.
If you are unsure about your investment property’s depreciation potential, let us know and we’ll help you get in touch with someone who can help you. It may be time to talk with BMT & Associates, for example.