18 May 6 Facts Every Accountant Should Know About Depreciation
So many property investors still fail to maximise their tax deductions each year by not using a quality depreciation schedule. Unfortunately so many accountants are still giving poor advice. Here are 6 facts every accountant should know to ensure their clients are maximising the benefits of depreciation on their investment property.
- Depreciation is typically one of the largest deductions claimable by property investors – average deductions for residential properties range from $6,000 to $12,000 for the first year, and over $30,000 for the first 5 years combined;
- Old properties can still generate great returns- 90% of old (pre-1987) properties still qualify for depreciation due to renovations and asset replacements. Always check feasibility with a quantity surveyor before you disregard an old property;
- Claim for other peoples work – costs of renovations and assets installed pre-purchase can be estimated by a quantity surveyor and claimed by the current owner;
- Claim for your clients renovations including assets thrown out- claim immediate deductions for construction and assets disposed of during renovations and property improvements, and then claim for the all the new stuff. If costs aren’t complete or available a quantity surveyor is qualified to estimate those works for the purpose of depreciation;
- Benefits outweigh impact on CGT- inflation, opportunity cost, exemption of Division 40 assets and discounts all mitigate the full impact and make a depreciation schedule more valuable today, than savings realised at some time in the future;
- Budget and DIY reports end up costing thousands more – any report that is not completed by a quality quantity surveyor will cost the investor thousands in missed, or ineffectively managed deductions. For the sake of hundred or so tax deductible dollars, invest in the best report available. And remember biggest isn’t always best!
For any advice regarding capital allowances and depreciation for residential or commercial properties the team at Capital Claims Tax Depreciation is ready to assist.
With 18+ years experience in the construction and quantity surveying industry Marks specialist expertise have been sought in consultant capacity by professional bodies such as the National Institute of Accountants and the National Tax and Accountants Association, and he has presented at various property and tax seminars and expos nationwide.
Marks detailed understanding of relevant legislation, combined with his acute attention to detail have culminated in the development of the industrys most comprehensive and detailed inspection and reporting tools, designed to maximise every claim for investors. Mark is passionate about improving the affordability of investment property ownership. By providing a premium service at a competitive cost, Capital Claims Tax Depreciation ensures its clients are achieving the maximum tax savings possible.