A Tax Depreciation blog by Paul Bennion.
The importance of claiming legitimate tax deductions such as depreciation has been highlighted by new ABS figures which show that Governments throughout Australia collected more than $1 billion in taxes every day during the June 2014 quarter. This high level of taxation is revealed in the latest Government Finance Statistics that show that all levels of Government in Australia collected a total of $117.56 billion in taxes during the three months to June 2014. This represented an increase of 4.7% on the $112.25 billion in taxes collected during the March 2014 quarter.
The figures show, that on average, Governments throughout Australia are now collecting around $1.3 billion in taxes every day. With the new financial year under way, these taxation figures underline the importance of all Australians claiming their legitimate tax allowances to help reduce their taxable income. One way is to take advantage of the legitimate tax depreciation benefits that flow from investing in property. For example, an accurate tax depreciation report for an investment property can generate thousands of dollars in potential tax savings each year. These generous tax depreciation benefits can equate to up to 60% of the property price of a property. That means potential tax benefits of $300,000, for example, on a property purchased for $500,000.
Already during the first months of the 2014/2014 financial year, many investors have decided to buy investment properties to coincide with the start of the new financial year. This is particularly the case with high income earners who want to reduce their taxable income yet invest in property to create wealth. If you buy an investment property, it is important to complete a tax depreciation schedule as soon as possible after settlement so that it complies with ATO guidelines.
For the initial cost of a tax depreciation report – which is tax deductible – by legitimately claiming their full depreciation allowances clients can achieve thousands of dollars in tax benefits each year from their investment. Even an older style home can also qualify for substantial tax depreciation benefits if a depreciation schedule is undertaken around the time of settlement. To protect their interests and ensure the depreciation report is fully compliant with ATO rulings, property investors should select a company, like DEPPRO, who are a member of the Australian Institute of Quantity Surveyors (AIQS) and uses systems that are fully compliant with ATO rulings.