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Tax Depreciation Report

PPG_Blog_June_image 2_asset depreciation

A tax depreciation report or schedule is an absolute must for any smart property investor. Nearly all properties can be depreciated, yet many of these are not claimed during tax time. This generally means more money for the taxman and less in your back pocket!

Tax depreciation (also known as property depreciation) is a legitimate deduction against assessable taxable income, generated by a residential or commercial investment property. It works by allowing property investors to deduct a portion of the original costs of:

– plant and equipment such as furniture and fittings, and

– capital works such as renovations.

These deductions can be made on their investment property each financial year, over the effective life of that item.

The Australian Taxation Office (ATO) recognises that the value of capital assets gradually reduces over time as they approach the end of their effective life. These assets can be written off as a tax deduction – known as depreciation.

Different items within a rental property have different rates of depreciation based on the effective life of the item. Qualified inspectors have the expertise and knowledge to know which items are depreciable and how savings can be made. They should physically inspect the property to make accurate assessments.

To claim maximum tax benefits on an investment property the Australian Taxation Office (ATO) requires property investors to complete a fully compliant tax depreciation report. The cost of getting the completed report is fully tax deductible.

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