With the commencement of the new financial year, investors may be having a tough time cracking the code of improving their deductions. Can you claim depreciation on a rental property? Can you claim depreciation on an old property? There may be many such questions that may be haunting your minds to save some of your hard-earned money. So if you are someone who is looking out for what and why to claim for a deduction, here is what you need to know:
The buzz about depreciation
A depreciation schedule is basically a kind of deduction that an investor can claim on his/her property. As the property ages, the wear and tear on your building’s fixture and structure stand eligible for deduction claims.
Claims on an old property
If you are someone having a thought in mind that only new properties can be claimed for depreciation, then you need to clear this concept in mind right now. There is no hard and fast rule that your property needs to be new for depreciation claims. According to ATO, the properties that date back before July 1985 cannot be claimed for depreciation. But equipment and plants on the same property comes in the category of allowable depreciation on rental property and are not bound by any such restrictions for a depreciation claim.
Also, you need to know that even if you have not claimed for deductions on your property for the past two years, you can adjust it while filing for the current year tax returns.
Depreciation for long forty years
In concern with the orders issued by ATO, you can claim for write off on a property for a long term of forty years. So if you have brought a new property, then a piece of good news is that you can claim building tax depreciation for forty years. On the contrary, for old properties, the balance number of years from the forty-year term can be claimed for deductions.
Opting for renovation can be quite a costly task, but the only relief is that you can claim tax deductions in association with the renovations made on your property. For this, you can contact a quantity surveyor who will conduct a site inspection and further let you know the tax depreciation cost while filing for deductions.
Hire a qualified surveyor
Always consider hiring a professional and experienced quantity surveyor, as they are the ones who can chalk out the right depreciation schedules for your benefit. Quantity surveyors possess high-level knowledge in their field and have all the latest information. Owing to their association with different regulating bodies, they can help you in significant ways to frame out proper depreciation schedules.
Many investors are not aware of the building tax depreciation they are eligible for. And, even if they know they may not know the exact amount that they can claim for on their property. Thus the onus lies on hiring a quantity surveyor who will definitely charge you for their services but, in return, can save you from simply oozing out oodles of money from your pockets.