Your depreciation and tax return in Australia is your best asset for putting money away into your bank account. It doesn’t matter if you live and work overseas. Your Australian revenue is guaranteed when you have investment properties and professionals taking care of them.
When you purchase investment properties, whether commercial or residential, you must always declare the income they bring you. Returns are minor in the beginning thanks to negative gearing. This happens when the overall expense of maintaining the property costs more than your rental income. But you’ll get your money back over time thanks to depreciation and claiming other items on tax.
As your property, and the items in it, depreciate over time, it equals more money in your bank account. You’ll receive the maximum benefit when you get a depreciation schedule from a professional. We have a lot of clients asking about this process and how it works. This is what we tell them:
Buy the property and finalise the settlement
Call Deppro and schedule a visit
The quantity surveyor visits the property, takes pictures, and makes notes
Answer any questions the surveyor has and provide the necessary documents
Your depreciation schedule arrives
When you receive your depreciation report, hand it over to your accountant who manages your tax return in Australia. They’ll amend past returns and use the report to get you the best amount back on future ones.
It’s easier than you might think to tie your depreciation schedule to your tax return in Australia. Of course you’ll be affected by negative gearing (unless you snapped up an amazing property), but depreciation and other tax deductions over time will earn your money back. Once the quantity surveyor has done their job and the report is yours, hand it over to your accountant. They’ll make sure your investment pays off.
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The idea of property investment is exciting. Whether you’re looking to expand your business or you’re an investor wanting to add another portfolio, the anticipation outweighs the dread…most of the time. People who are new to the property game often find themselves disappointed and reaching too far outside their budget. How do you avoid this yourself?
You have dreams, but reality will give you a rude awakening if you’re not careful. Working towards a goal slowly and steadily ensures stable growth. If you peak too high, too fast it will all come crashing down. Not meeting payments, having bad tenants, or finding faults with the property after purchase are all possibilities if you rush into buying.
Even though most people still look for their next property investment online, the newspaper listings are still a valuable resource.
When we say hunt everywhere, we also mean broaden your search radius. Seasoned property investors and business owners have places all around Australia. Search online for the best growth suburbs in Australia, you’re bound to see something that ticks the boxes. Which leads us to the next point.
Write a list
This will keep you on track, and honest. Whether you call it a purchase plan, a property checklist, or something else, make sure it’s on hand when you’re looking at places. If you’re concerned about depreciation, add these to the list:
Has any renovation work been done recently?
Are the fixtures in good condition?
Will this still give me income X years from now?
What’s the area in meters squared?
Turn off your emotions
This step is crucial. Letting your emotions get into the mix leads to burnout and heartache. When things don’t turn out the way you hope (you lose the bid, offer rejected, etc) of course it’s disappointing. But you keep your chin up and carry on. The best property investment for you is out there; you just have to look a little harder.
This point ties into point number one about realism. If you’re an investor looking for rental properties, don’t think about the hunt as looking for your dream home. Not even if it’s ten years down the track. You’re looking for a place that will attract tenants and generate income for you. The best property investment for you might be a home or an apartment that doesn’t suit your tastes, but will be perfect for someone who rents it from you.
Get the professionals on your side
As soon as the property is settled, call Deppro to have a quantity surveyor inspect the property. You’ll receive the best, most accurate depreciation schedule if they see the place in its original condition.
Also invest in a property manager to find tenants (again, avoiding emotional investment). They’ll manage the bulk of caring for your portfolio. After you receive your tax depreciation report, hand it over to your accountant. They’ll make sure you get the maximum refund every year, contributing to your coffers so you can keep growing.
http://deppro.com.au/wp-content/uploads/2017/04/luxury-190x127.jpg127190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-09-11 03:58:372017-09-11 04:03:205 ways to find the best property investment
There’s a common perception that a property investor lives the high life. Their portfolio rakes in hundreds of thousands of dollars that funds an extravagant lifestyle others can only dream of. This is true, but only for a small number of them. One type of property investor likes to boast about their success, others prefer to keep it quiet. Do any of these traits look familiar?
The dreamer: This type of property investor has big visions of wealth, owning a large portfolio, and making it in the ‘big leagues’. You’ll find them constantly looking at property listings and researching suburbs with good growth. It’s good that this investor does their homework, but their dream might cost them if they put down a deposit they can’t afford. In property, you must spend money before you can make it, something that this type forgets.
The renovator: This property investor looks at the old and outdated, sometimes the crumbling, and sees something beautiful: potential. Occasionally they’ll buy the home for the sake of the land because it’s in a good location, and demolish the house. They’ll build it up again into a property that will attract tenants and give them a better return. This type of property investor, though, has sometimes watched too many renovation shows and has visions of doing everything themselves. That’ll turn the investment property into a money pit rather than an asset.
The silent assassin: You’ve seen agents and reps on the phone at auctions communicating with their clients and making bids. This type of property investor has the experience to know what they want. They’ll trust a rep to inspect the property on their behalf and put down money at the auction.
Another side to this investor is they’ve often got a full or part-time job that keeps them busy. They don’t boast about their property prowess. When they turn up at the auction they’ll wear sunglasses and stand at the back of the crowd. They look like a silent observer…until the bidding begins.
The wise: This property investor isn’t necessarily older, but they’ve got experience in the property market. They were born into it, had an early interest, or just educated themselves. The wise property investor does their research, knows the best growth suburbs, and has their property manager on speed dial.
The one-home ponies: This type is probably your parents, or someone else’s. After the children leave the nest, their parents move into a smaller home. Some will sell the family house, others will renovate it and lease it out to tenants. They’re an ‘accidental’ investor, and don’t think of hiring a property manager or getting a depreciation report until someone else suggests it.
http://deppro.com.au/wp-content/uploads/2017/09/deppro-resize-3.jpg126190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-09-11 03:13:182017-09-11 03:13:185 types of property investor
One of the great successes you can make as an investor is getting your property report done and dusted to accurately list all claimable tax depreciation items. By having a tax depreciation schedule, you’re getting more money in your tax returns and that can take you to your financial goals faster. But if you make mistakes like these, it’ll end up costing you instead.
Ideally, you want to have purchased a property that’s recently undergone renovations. It’s fixtures are relatively new and you can claim depreciation on work the previous owner has done.
If you did your homework before signing on the dotted line, then there’s not much cause for concern. But a crumbling, ‘project’ property will drain the money faster than you can earn it back because you’re spending it on new fittings and appliances.
When you submit your property report to your accountant, the next step is to hire a property manager to look for tenants. Don’t do this job yourself; it makes the hard stuff more complicated down the road. For example, what happens after you get friendly and the tenants do something that would normally get them evicted? Are you prepared to look them in the eye and ask them to move out?
Letting a property manager choose the tenants will save you an emotional and financial headache. A good tenant won’t cost you money because they treat your property with respect and follow the rules.
Like any business owner, you’re hiring professionals like depreciation specialists to take care of your property report. You’re paying property managers to handle your asset so you can focus on expanding your portfolio. All of this is part of an investment strategy. Don’t treat the property game like a hobby; it’s a business.
Having success in property investment means having a level head and doing the right things. By not buying old, crumbling buildings and by letting someone else screen tenants, you’re on your way to becoming a successful businessperson. Tax depreciation, property reports, and other formal matters are hard tasks, but worthwhile when you’re creating a successful brand. Having the professionals, like Deppro, on your side makes it easier.
http://deppro.com.au/wp-content/uploads/2017/08/deppro-resize-mistake.jpg126190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-08-25 01:56:282017-08-09 02:02:52What NOT to do before and after getting your property report
A depreciation schedule is a necessary tool that every property investor or business owner must have if they want to pay less tax and recover debt faster. It has been said that in some circles up to 80% of investors don’t know that they can depreciate their investment property, some don’t even understand what depreciation is.
Claiming the property and the items inside it on your tax return will give you a higher return, but not straight away. Items depreciate over time, and their depreciation costs will increase the longer an investor owns them because they’re given a ‘lifespan’ for their usefulness. Any item, from the fire alarm in the ceiling to the carpet on the floor, depreciates in value. Items under $300 are instant write-offs.
The depreciation schedule
It always contains two categories: capital works, and plant and equipment. Capital works are part of the property itself and any renovations done to the structure. Work done to the kitchen, the carpets, and even the patio gets included in capital works depreciation.
The plant and equipment category is comprised of items that can easily be moved out of the home or commercial premises. Whitegoods, furniture, electricals, and even rubbish bins are included. This is the category that some investors have trouble with because they don’t know they can even claim rubbish bins as an instant write-off.
The depreciation calculations, though, rarely get done by the investor who owns the property; this is a job for a quantity surveyor. After the property settlement, the new owners must get a surveyor in as soon as possible so they can make an accurate assessment. They’re the ones who write up the depreciation schedule. They calculate the value of the items in the home and how they’ll decline in value over time. Depreciation schedules last forty years, starting from the settlement date.
Investors don’t have to worry about working the depreciation schedule into their tax return, either. Once the quantity surveyor has completed their assessment, the investor’s accountant can handle the rest. They use the schedule as a guide to assist in making an accurate return. They’ll do their best to make sure their client pays as little tax, and gets the best refund, possible.
Business owners without a depreciation schedule are missing out hundreds of thousands of dollars over the time they own a property. Contractors like Deppro come to assess what their clients can claim, and work hard to ensure they get the maximum amount back.
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Who writes your tax depreciation schedule? Your trusted quantity surveyor does. You can’t get a schedule without them for a variety of reasons.
How early can I engage Deppro as my quantity surveyor?
You can engage Deppro very early in building projects. In fact quantity surveyors are more often associated with building and construction during initial project stages. They look at the building plans and the list of materials required, and from that they estimate costs.
Quantity surveyors work in a field that has the potential to take them around the world. Where there’s a building site, their services are required. They’re in their offices the majority of the time writing reports and analysing information, though site trips are frequent.
Before they work on building sites or for tax depreciation firms, an aspiring quantity surveyor attends university for their bachelor’s degree. These studies centre around urban development, construction design, engineering, and some economics specialities.
Your accountant is there for your financial needs. It’s their job to give advice and handle your statements, invoices, and returns. They aren’t licensed or versed in how to value property and all of the specifics of materials inside.
The ATO won’t accept a tax depreciation schedule from anyone else. Deppro’s quantity surveyors are qualified to make site visits, analyse the data and estimate the costs. They use critical thinking and analytical skills when looking over a property. Through this you’re guaranteed a thorough report that gives you maximum benefits.
The tax depreciation schedule is a ticket to the best return for anyone with an investment or commercial property. It contributes to your tax return, boosting it by tens of thousands over the time you have the investment in your portfolio. Deppro’s quantity surveyors are highly educated, accurate in their estimations, and accredited by the ATO, setting you up for nothing but success.
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Deppro’s tax calculator, depreciation services, and expert advice give investors around Australia the boost their efforts deserve. It’s not just property investors who take advantage of these services. Real estate agents and tax professionals partner with Deppro for reliable depreciation. Business owners with one commercial property (or several) will find that the online tools will make life easier to manage.
The tax calculator
Run as a free service through Deppro’s website, it requires this data to work:
Date of settlement
Area in meters squared, and
Year of construction
The result is generated within seconds. The ‘report’ you’re given is an overview of what the comprehensive report will look like. Here’s an example:
This report assumes no capital works are scheduled for the building, hence the nil values in that column. But even without this category in depreciation, your building will add over six thousands dollars to your returns in three years.
The property depreciation tax calculator gives Deppro customers an idea of what their depreciation schedule will look like. After using it, the customers call Deppro for a quote and set up an appointment with one of their quantity surveyors to inspect their property. Inspections are recommended as soon as the settlement with the agent is complete. Quantity surveyors perform better work when they see everything first hand in its original condition at purchase.
The depreciation schedule and the tax calculator are useful for your accountant, too. Because of tax laws and different areas of study, accountants can’t write depreciation schedules themselves. They use the report to create a detailed return, instead. Depreciation schedules are ATO compliant only when written by a quantity surveyor. The accountant is the next link in the chain for customers to claim the maximum amount on their return.
It’s said that as many as 80% of property investors don’t know they can claim depreciation, a lot of them are missing out on this extra income that could help them expand. It’s common practice to use the money for paying off debts. Investors even use it to put down initial payments on a new property. The tax calculator, an ATO-compliant depreciation schedule and a skilled accountant are tools that you can’t go without if you want to do good business.
http://deppro.com.au/wp-content/uploads/2017/08/deppro-resize-calculator.jpg142190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-08-09 01:32:042017-08-09 01:32:04The tax calculator; an essential tool for good business
Investors and business owners order depreciation on investment property so they can efficiently handle expenses. Many investors, though, don’t know about depreciation and how it can make their lives easier. It absolutely pays off financially, and there’s other perks as well.
Most people don’t think about taxes everyday, but the professionals do. Ordering a depreciation report on investment property removes a lot of guesswork and takes the pressure off their minds. Thanks to the experts, they can make accurate deductions for the time they own the properties in their portfolios. Deppro’s reports last forty years, long enough to hold the property and sell it on.
Access to a depreciation schedule is easy for any investor, whether they’re just starting out or played the game for a while. Companies like Deppro exist to help people at any stage of their investment game. They’ll explain how the report works, how items are categorised, and what to do after the clients get the depreciation schedule in their hands. This makes life easier, especially for newcomers, because the experts are taking care of everything.
When you ask the experts for help with depreciation for investment property, you’re also getting an education. Deppro guides their clients through the process of ordering the report and how to use it to maximise deductions. You’ll also learn what a quantity surveyor does, and what items will fall under ‘capital works’ if you ever renovate your property.
When you get expert help for depreciation on investment property you’re making less work for yourself. You get a depreciation schedule that lasts for decades and saves you worrying about accurate numbers. The report, and the expert help that comes with it, is accessible to anyone at any stage of building a portfolio. You’ll also learn a few things along the way, like how to use the report for taxes, and whether you can claim the new carpet for the office as a deductible expense (yes, you can).
http://deppro.com.au/wp-content/uploads/2017/07/deppro-resize-5.jpg126190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-07-19 00:01:372017-07-06 00:32:53Depreciation on investment property makes life easier
There’s experts out there, like Deppro, who efficiently handle tax depreciation so their clients can get the best possible return. Seasoned property investors know about tax depreciation and how to claim deductions every year. This article is for the first-time investors wanting to get in the market, but not quite able to wrap their head around depreciation.
It’s a claimable expense
Tax depreciation is deductible from your income, giving you a greater tax return.
You need a depreciation schedule
This is absolutely necessary so investors and business owners can claim the maximum amount over time. Depreciation schedules begin from the settlement date and estimate the value of taxable items over their useful lifetime.
Getting a depreciation schedule takes the guesswork out of evaluating items in your property as the years pass. Quantity assessors, like those who work for Deppro, will do an inspection. The depreciation company uses these to write a report and a depreciation schedule. These are delivered to the client within the month. This often overlooked information helps investors significantly boost their returns.
You can buy more properties
The money earned back from tax depreciation lessens the debt investors take on when they buy property. It’s common for them to use the extra funds to expand their portfolio. Once they do, they repeat the process of getting a depreciation assessment.
The report isn’t an annual thing
The quantity surveyor will only need to visit the property once. They’ll take pictures and make notes before heading back to the office and drawing up the report, outlining the values of the items they see. If you do renovations on the home, though, you will need to update this report for an accurate schedule. You’ll get in trouble with the ATO if you make a claim with false information.
The depreciation schedule must come from a registered tax agent so that it complies with guidelines from the ATO. Deppro’s quantity surveyors are educated, accredited, and take pride in providing accurate reports.
http://deppro.com.au/wp-content/uploads/2017/07/deppro-resize-4.jpg126190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-07-14 00:01:462017-07-06 00:24:00What everybody ought to know about tax depreciation
Rental property depreciation is a bit of a mouthful but it’s an essential part of owning an investment property. Everyone makes mistakes when it comes to complicated tax matters, and that’s the reason why clients come to Deppro for professional help. We list a few common mistakes (plus more here) so you can avoid them.
People don’t depreciate. Ever.
80% of property investors neglect having their rental property assessed for depreciation. This mistake costs them thousands of dollars over the time they own the house, with the money they could earn going back into tax instead.
Deppro calculates that getting a depreciation report can earn investors back 60% of the property’s purchase price. These funds are often used to save for future properties.
Confusing the categories
The deprecation specialists place items of value into two categories: plant and equipment, and capital works.
Plant and equipment: The owners often move these into the house when they buy it, and they can be removed just as easily. Items in this category include:
Hot water systems
The other category is capital works. These items are built into the house. They include:
There’s more information from the ATO about assets eligible for depreciation in this PDF.
People overlook potential deductions
Investors make this mistake a lot because they don’t know what they can claim. This all adds up to a larger depreciation on the report the new owner receives. Claimable items include something as large as a swimming pool to something as innocuous as a smoke alarm. These potential deductions leave investors out of pocket when they’re not claimed.
If you’re an investor and don’t have a depreciation schedule, you’re missing out on thousands of dollars in returns every year. Those who do have a schedule are liable to make mistakes, like confusing what item goes into which category. To avoid mistakes like this, get an expert like Deppro on your side to take the guesswork out of rental property depreciation.
http://deppro.com.au/wp-content/uploads/2017/07/deppro-resize-3.jpg126190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-07-12 00:07:342017-07-06 00:12:31Rental property depreciation mistakes to avoid