Don’t forget to depreciate when you update
One of the most investor common enquiries received by specialist Quantity Surveyors is the question ‘what happens to the depreciation deductions that can be claimed if you decide to remove an asset and replace it with a new one?’
There are a couple of rules and recommendations a renovating for profit investor must follow to ensure that they claim deductions correctly and maximise their claim.
- Any assets removed during a renovation may have remaining deductions available. It is important to ask about scrapping during the renovation process, as owners are entitled to claim the remaining deductions for any items removed and replaced during the renovation. To be entitled to claim assets removed a ‘before renovation’ depreciation schedule should be arranged.
- Following this, an ‘after renovation’ deprecation schedule should be prepared to take into account the new assets and structures found within the property. At just a small adjustment fee, a new schedule will be completed rundown all the depreciation claims available for the life of the dwelling (40 years).
- For investors purchasing an older investment property and seeking to obtain a depreciation schedule for the first time, it’s important to note that any renovations completed by a previous owner can also be claimed as long as the work took place within the legislated dates.
- Enlist a credible tax depreciation specialist such as BMT Tax Depreciation to take the financial stress out of renovating a property. BMT are leading experts in the field, providing ATO compliant and comprehensive tax depreciation schedules to property investors Australia-wide.
To ensure all items are accounted for when completing renovation work, investors should seek professional advice, as property deprecation can significantly increase a property owner’s annual taxable income. Simply call BMT Tax Depreciation on 1300 728 726 to discuss any property scenario.
About Bradley Beer
Bradley Beer is Managing Director of BMT Tax Depreciation. Brad has over 15 years experience in the property depreciation, building and construction industry. Brad is actively involved in educating property investors and property-related organisations about the importance of tax depreciation.
Brad is a regular keynote speaker and presenter covering property depreciation services on television, radio, at conferences and exhibitions Australia-wide. Some of these include:
* Property Expos — Australia Wide
* National Tax & Accountants Association
* Defence Housing Australia
* Taxation Institute of Australia
* Real Estate Institute Australia
* Regular training events for national corporate real estate groups
* Regular appearances on Foxtel Program Your Money Your Call shown on Sky News Business Channel.
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.