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Are you missing out on deductions?


Is depreciation important to an investment decisionHow much you can claim in your tax return is an often overlooked element of property investment.

There’s two main reasons for that:
Investors don’t realise how much money they are missing out on by failing to claim.
They don’t understand it is a perfectly legal way of minimising tax.

We are talking about claiming depreciation
Depreciation is simply the amount the Tax office lets you claim for wear and tear on your property if the property is used as an investment and rented out, the Australian Taxation Office allows owners to claim wear and tear against assessable taxable income each financial year via tax deductions.

Of course, the more deductions you can claim on a property, the higher your tax benefit. And as a property investor, it makes sense to be able to claim as many deductions as you’re legally entitled.

WHAT TO CLAIM

The ATO allows property investors to claim a rental and investment property depreciation deduction related to the building and plant and equipment items contained within it. And there are more than 1500 items identified as depreciable assets under capital works, including:

  • Built-in kitchen cupboards
  • Clothes-lines
  • Door and window fittings (such as handles, locks)
  • Driveways
  • Fences and retaining walls
  • Garages
  • Sinks, basins, baths and toilet bowls

Under plant and equipment articles, deductions up to 35 per cent of construction costs of a residential building can be made and include things like carpet [and other removable floor coverings], hot water systems, air-conditioning, security systems, blinds, curtains and light fittings.

Many investors think about depreciation after they’ve purchased a property but it is often better to consider this information before buying to maximise savings. For example, a new property has a lot more depreciation allowance than an older pre-owned property.

HOW TO CLAIM
To claim depreciation deductions, investors need to complete a personalised tax depreciation schedule that outlines deductions available on a specific property for the life of the property, which is used by your accountant when preparing a tax return.

By utilising the benefits of property depreciation, an investor can turn what may otherwise be a negative cash flow into a positive cash flow.

To find out how you can use tax depreciation to save on your current or next property purchase, contact Allied Investment Group on 1300 886 149.

Allied Investment Group specialises in helping clients take control of their finances so they can have more choices, freedom and security in retirement.

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Robert was patient and spent time explaining everything. We felt we could trust him to do a good job. Now some 12 months on, I can say we are very happy with our new investment property, and very thankful we decided to go ahead.

Robert was patient and spent time explaining everything. We felt we could trust him to do a good job. Now some 12 months on, I can say we are very happy with our new investment property, and very thankful we decided to go ahead.

Allison & Chris - Blacktown, NSW

When I first spoke with Allied Investment, my wife and I had been thinking about property investing for a while. We did need someone to help us with advice and guidance in this area. We can highly recommend Robert & Michael from Allied Investment Group if you are looking at buying an investment property.

When I first spoke with Allied Investment, my wife and I had been thinking about property investing for a while. We did need someone to help us with advice and guidance in this area. We can highly recommend Robert & Michael from Allied Investment Group if you are looking at buying an investment property.

Chris & Sam - Holsworthy, NSW
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