A blog by Paul Bennion.
First time property investors buying apartments are the most common group of investors failing to obtain their full tax depreciation entitlements, despite the large number of new strata developments being sold throughout Australia, warns tax depreciation expert, Paul Bennion, Managing Director of DEPPRO.Building approvals for flats and apartments in Australia have jumped by over 90% in the last three years, reflecting the growing popularity and affordability of apartment living.According to Mr Bennion, however, many first time investors – particularly those buying apartments – fail to understand that tax benefits from property depreciation can be just as important as rental income.”While there are many issues concerning depreciation entitlements on properties, in most cases strata style homes such as apartments provide a higher rate of depreciation than houses – all being equal.”This means significant tax savings for investors – if eligible depreciation entitlements are claimed,” Mr Bennion said.Obtaining full tax entitlements is another area many investors fall short, resulting in millions of dollars in tax benefits being lost each year.”Generally, owners of strata style homes only depreciate the internal fixtures of the property, without taking into account other items such as common property areas including car parking and recreational facilities,” said Mr Bennion.”Many investors don’t understand that older style apartments can also qualify for substantial tax depreciation benefits, if a depreciation schedule is undertaken. In addition, if the older style apartment has recently been renovated then additional depreciation benefits can also apply.”
