Buying your first investment property can be daunting and exciting at the same time. You are likely to question; have you made the right decision for your financial needs? Will you have great tenants? Have you invested wisely? In the right property? In the right location?
These questions plus more will be racing through your mind. And a lot of the time, you will have a financial adviser, real estate agent, conveyancer or solicitor who will help you go through the motions of what you need to have in place to progress to the settlement date. But unfortunately, there is one document that is an important document, that, despite all this help – might slip through the cracks and be missed. This document is known as a tax depreciation schedule.
A tax depreciation schedule is a comprehensive report that outlines the rental property depreciation deductions that are available to the property investor for owning that property. It can total thousands of dollars in deductions which can help to reduce an investor's tax. A qualified quantity surveyor is one of only a few professionals that can generate a tax depreciation schedule.
What is rental property depreciation?
The ATO allows property investors to claim deductions against the income they generate from their investment property. You may be familiar with some of these deductions, ie. interest on loan, real estate management fees, repairs and maintenance. However, many first-time property investors and even some experienced property investors just don’t know that they could claim a deduction for the wear and tear of their investment property. This is known as the rental property depreciation deduction or the tax depreciation deduction. It is one of the largest deductions you can claim on an investment property. You could potentially claim thousands in deductions.
How do I claim tax depreciation?
Once you have ordered and received your tax depreciation schedule you will take this along to your accountant. They will claim on your behalf for the relevant financial years along with any other deductions you are entitled to claim.You can use the depreciation calculator provided by Capital Claims if you want to get an idea of how much depreciation cost you will have to incur.
How do I know if it is worth claiming the tax depreciation deduction?
Here at Capital Claims Tax Depreciation, it is our guarantee we do not complete a tax depreciation schedule on a property that isn’t worthwhile. We complete a free feasibility on every investment property.
To complete your free feasibility, we request your investment property address and a few other details like your settlement date. We then view your investment property with our online systems and give you an estimate of what you can expect to receive in tax depreciation deductions. This allows you to make an informed decision if you would like to go ahead with investing in a tax deprecation schedule.
