A blog by Paul Bennion.
A tax depreciation report prepared by a professional property depreciation company can identify hundreds of items in your investment property with legitimate depreciation value.
For owners of investment properties, claiming tax deductions on items in your rental property with depreciation entitlement can help to reduce your tax payable and boost cash flow.
According to Paul Bennion, Managing Director of tax depreciation specialist DEPPRO, hundreds of household items including dishwashers, dryers and even garden gnomes can be depreciated for tax purposes.
“Many investors underestimate the number of items that can be depreciated for tax purposes. The comprehensive list even includes garden gnomes and cubby houses, and if you own an apartment, common areas such as car parking and recreational facilities may also be eligible,” Bennion said.
However, to qualify for legitimate tax deductions, an investor must have a fully compliant tax depreciation company undertake an onsite inspection of their property and compile a depreciation report based on this inspection.
“Estimates of tax depreciation benefits for an investment property made from an office desk will not be accepted by the Australian Taxation Office,” Bennion warned.
“Depreciation is a complex area of taxation. A professional company is required to undertake a depreciation report because of constant changes in tax rules.”
According to Bennion, the ATO is now taking a more aggressive approach to tax deductions made by residential investors and has asked a large number of investors to provide more details about their claims relating to property investments.
“Property investors should check that the company undertaking their tax depreciation schedule is a member of the Australian Institute of Quantity Surveyors (AIQS).
“Employing a company who is a member of AIQS such as DEPPRO gives protection to consumers that their tax depreciation report complies and is completed in a professional manner,” he said.