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PPG_Blog_oct_image 3_depreciation schedule health check

The tax benefits from depreciation on an investment property can be extremely valuable, but are often overlooked by some landlords.

The issue is that some investors either aren’t aware of the benefits associated with depreciation, or they don’t have an up-to-date depreciation schedule.

The Australian Taxation Office (ATO) allows property owners to claim the wear and tear, depreciation, of their investment as a deduction. In order to claim these deductions, investors should engage a specialist Quantity Surveyor to complete a Tax Depreciation Schedule. The costs associated with a depreciation schedule, which can be between $500-$700 per report, are also tax deductible.

Each year, landlords can claim between 10% and 40% of a variety of depreciable items, and sometimes more. In many cases, 2.5% of the building cost of the investment home is also claimable on an annual basis. New homes in particular, can provide significant and cumulative depreciation claims over several years.

So if you don’t currently have a depreciation schedule for your investment property or you think your existing schedule might be out of date, seek advice from a professional. Claims can sometimes be back dated by up to two years.

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