A Property blog by Paul Bennion.
The average new home loan in Australia is now $310,300, yet it is estimated that only one in five residential property investors claim their full tax depreciation benefits. According to figures released in July by the Australian Bureau of Statistics, property owners in New South Wales have the largest average home loan ($330,3000), followed by Victoria ($323,100) and then the Australian Capital Territory ($317,200).
This means the average Australian home loan has effectively doubled in the last 10 years – from just $152,000 in 2001 to $310,300 in 2011.
Yet, according to Paul Bennion, Managing Director of tax depreciation company, DEPPRO, despite the growth in average borrowings to purchase a property, most investors are not aware of the tax benefits that can be obtained through depreciation of an investment property.
“Most investment property owners don’t realise that tax benefits through depreciation can be equivalent to 60% of the total purchase price of their property,” Mr Bennion said.
“The cost of a tax depreciation report can be as little as $600 (which is tax deductible), but the cash flow benefits it can deliver each year may be several thousands dollars for each property,” he said.
However to qualify for these major tax depreciation benefits and achieve maximum legal tax deductibility across all areas of investment property ownership, investors must ensure they comply fully with guidelines and procedures outlined by the Australian Taxation Office.
Using the services of a qualified and authorised tax depreciation company, such as DEPPRO is the best way property investors can ensure they claim their maximum tax depreciation entitlements.