Investment property owners often miss out on thousands of dollars due to two main reasons.
1. They don’t know what depreciation entitlements they can claim for renovations or refurbishments to their investment property.
2. They don’t use a qualified Quantity Surveyor to prepare a tax depreciation schedule.
Follow the process below to ensure your tax depreciation schedule is right the first time around.
Scrapping is the removal and disposal of any potentially depreciable asset from an investment property. When these old assets (like carpet and hot water systems) are replaced or ‘scrapped’, the owners may be entitled to claim them as a tax deduction. In the year the item is scrapped, the remaining depreciable value can be written off as a tax deduction.
Get a “before renovation” tax depreciation schedule
Having a tax depreciation schedule before completing renovations will save you time and money when making a claim. In case of an audit by the Australian Taxation Office (ATO), a valuation of all items in a property, as well as adequate photographic records is required.
Get an “after renovation” tax depreciation schedule
A second schedule is prepared after completion of the renovation, identifying the value of all new plant and equipment and capital expenditure within the property. The adjustments will be made to your tax depreciation schedule for a small adjustment fee and should not cost you as much as the initial tax depreciation schedule, depending on the amount of work you have done. The new schedule will outline all the depreciation claims available for the life of the property (forty years).
Only deal with a credible provider of tax depreciation schedules
With over sixteen years of Quantity Surveying expertise, BMT Tax Depreciation is the leader in providing ATO compliant and comprehensive tax depreciation schedules to property investors Australia wide. At BMT, our qualified team of Quantity Surveyors meticulously prepare and customise each and every BMT Tax Depreciation Schedule, ensuring you claim everything you are entitled to.
Scrapping is a complicated process that requires the expertise of a specialist Quantity Surveyor such as BMT Tax Depreciation, in conjunction with an Accountant. With BMT you know you’re not going to miss out on anything and your Accountant will love you for it.
Article provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Managing Director of BMT Tax Depreciation. Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia-wide service.