Top Depreciation Claims for Property Owners in Australia

There are various ways in which landlords can save money when paying their annual taxes. But in most cases, they end up paying hefty taxes due to a lack of information about the eligibility of filing depreciation claims.

Here in this post, you can see the top tax deductions that you can claim for your property:

1. Installed appliances depreciation

If you have installed appliances at your home, such as dishwashers, air conditioners, washing machines, etc., the owners can consider claiming deductions based on the effective life of the appliances.

2. Maintenance and wear and tear

If you have spent a sum on the upkeep of your property, you can claim depreciation for the building based on the amount invested. May it be a broken roof struck by a storm or a broken window due to a tree fall, all can be put up for a property depreciation claim.  

3. Strata title

People who are in possession of multi-storey apartments and subdivisions, stand eligible for strata title. Holding a strata title makes the owners eligible for claiming the amount that they paid as corporate body charges. The body corporate fee is levied on owners who own apartments, multi-story buildings, duplexes, townhouses, etc. Also, the owners can put up a depreciation petition for maintenance and garden development in such cases by including them as strata fees.

4. Property loan interest charges

If you have required a property loan when buying your property, the interest amount levied on the same can be filed for tax depreciation. The principal amount cannot be claimed, but the interest amount for the full loan is eligible for Deppro depreciation.

5. Building depreciation

If you have made any renovations to your building, you can claim the same on your property. Buildings that have been built on or before the 16th of September 1987 do not stand eligible for depreciation claims. However, buildings that have been constructed after that date are eligible for a depreciation claim. All you need to do is hire a professional who will make use of investment property calculator to come up with the best cost-cutting solutions.

6. Cost of advertisement for a rental property

If you are planning to rent out your property using any of the advertising methods such as brochures, print media, signboards, etc., then we have good news for you. Now you can claim the advertising cost that you have invested to rent your property to a tenant.

Conclusion:

To gain a better understanding of the depreciation rules, you can consider seeking advice from property depreciation consultants.

Top Depreciation Claims for Property Owners in Australia

There are various ways in which landlords can save money when paying their annual taxes. But in most cases, they end up paying hefty taxes due to a lack of information about the eligibility of filing depreciation claims. Hiring experts can help them go a long way in saving taxes leading them in a win-win situation.

Here in this post, you will get to read a list of the top tax deductions that you can claim for your property:

1. Installed appliances depreciation

If you have installed appliances at your home, such as dishwashers, air conditioners, washing machines, etc., the owners can consider claiming deductions based on the effective life of the appliances.

2. Maintenance and wear and tear

If you have spent a sum on the upkeep of your property that occurs due to wear and tear, you can claim depreciation for the building based on the amount invested. May it be a broken roof struck by a storm or a broken window due to a tree fall, all can be put up for a property depreciation claim.  

3. Strata title

People who are in possession of multi-storey apartments and subdivisions stand eligible for strata title. Holding a strata title makes the owners eligible for claiming the amount that they paid as corporate body charges. The body corporate fee is levied on owners who own apartments, multi-story buildings, duplexes, townhouses, etc. Also, the owners can put up a depreciation petition for maintenance and garden development in such cases by including them as strata fees.

4. Property loan interest charges

If you have taken a property loan while buying your property, the interest amount levied on the same can be filed for tax depreciation. The principal amount cannot be claimed, but the interest amount for the full loan size can be put for Deppro depreciation.

5. Building depreciation

If you have made any renovations to your building, you can claim the same on your property. Buildings that have been built on or before 16th September 1987 do not stand eligible for depreciation claims. On the contrary, buildings that have been constructed after that date can be put for a depreciation claim. All you need to do is to hire a professional who will make use of investment property calculator to come up with the best cost-cutting solutions.

6. Cost of advertisement for a rental property

If you are planning to rent out your property using any of the advertising methods such as brochures, print media, signboards, etc., then there is some good news for you. Now you can claim for the advertising cost that you have invested to rent your property to a tenant.

Conclusion:

There are various other depreciation claims that you can make apart from the ones mentioned above. To gain a better understanding of such claims, you can consider seeking advice from property depreciation consultants.

Everything You Must Know About Commercial Property Depreciation Deductions

In today’s era, entrepreneurs face many significant challenges. Professionals need to access everything immediately when business owners try to increase cash flow. But, to boost cash flow in a better way, the companies and commercial landlords have to update the depreciation schedule. So, as you read ahead you will learn more about the commercial property depreciation deductions. But, before moving ahead, let’s check out the results we got from some of our commercial clients.

Results depending on the industry

As for small workplaces, the claims for the financial year 2020 were equal to $18,004. This was quite less than the claims for the first 5 financial years, which was $58, 597. But, on the contrary, for those who own small warehouses, the claims for the year 2020 and across the first five financial years were $6,603 and $29,222 respectively. As for the results for city commercial building, the claim across five financial years was as high as $448,111.

How do professionals calculate the depreciation on commercial property?

As for the calculation, depreciation differs for different types of commercial buildings. Feel free to seek help from professionals if you are unsure about the depreciation on investment property ATO.

The first step to calculate the depreciation is classifying the buildings depending on the purpose. Later, the ATO comes up with depreciation rules for every type of category. There are many factors that can affect the rate of depreciation. These factors are applicable to buildings that fall under Division 43 and Division 40.

On the whole, the total depreciation a person can claim is divided between Division 43 and Division 40. Usually, professionals use the Prime Cost Method to calculate Division 43 depreciation. However, they use the Prime Cost or Diminishing Value Method to calculate the depreciation for Division 40 assets. Besides, Division 40 assets can come under the low-value pool based on the effective life. The classification would also matter on the maximum tax depreciation deduction done earlier.

How can a person claim property depreciation deduction?

When you need to claim the deduction, you must contact a quantity surveyor. As the professional presents a depreciation schedule, you can observe the amount you can claim every year. But, your claim would depend on the value of the commercial building. It may also vary due to the decline in the value of the income-generating assets. According to the rules of ATO, the surveyor should come up with a depreciation schedule only for buildings built after September 1989. The schedule would come into the picture even when you are unaware of the property’s construction costs.

As for the fees, you only have to pay for just one depreciation schedule. Once the surveyor coordinates with you, he would work out the assets that would depreciate in the future. The schedule is further sent to an accountant, for effective calculation of deductions. The accountant then considers the equivalent amount for the annual tax returns.

Conclusion:

If you have any questions regarding the depreciation deductions, then you need to reach out to tax depreciation professionals. In order to predict the tax depreciation investment property, you use the investment property calculator. But, if you’re an investor, who wants to maximize returns, then you could go through the depreciation reports. You can research online and avail the report which is available online. Apart from everything else, you can also seek answers for questions pertaining to capital gains.

Tax Deductions That Property Investors Can Claim

When you seek to achieve financial freedom, an investment property can be an attractive proposition. And, investment property comes with tax benefits. A landlord gets several options to bring down their annual tax bill. A large number of times, these deductions are the difference between a negative cash flow and a positive cash flow. Investors are eligible to claim deductions on their property for the period/s in which it was rented. And, they can claim a deduction for the portion of an expenditure that was used for business purposes. Therefore, they should calculate depreciation on rental property and prepare a record to prove all these details.

Here are the top tax deductions that property investors can claim:

1. Loan Interest:
Investors will be eligible to claim the interest levied on a loan for an investment property. They can also claim interest on any bank fees for servicing that loan. For instance, if you happen to incur $20,000 interest on your loan and $200 in loan fees, you can always claim them on your personal tax return.

2. Rental Advertising Expenses:
Landlords make efforts to find tenants and spend money on various types of advertisements. If you advertise your property using various online tools, brochures, and signs, you can claim them in the same year.

3. Land Tax:
If you have a rented home on your investment property, you use the land tax as a deduction. The tax and the timing may differ between states; the timing will decide when you can claim the cost. You may consult the tax advisor of that particular state to get an idea of the estimate tax returns. He will also let you know that you have claimed the right amount in the right year.

4. Strata Fees:
If your property happens to be on a strata title, you can also claim the cost of body corporate fees. If the fee includes garden expenditures and maintenance, you won’t be able to claim these expenses separately.

5. Capital Gains Tax Discount:
If you made a capital gain by selling the investment property, you must pay tax on profit. If you purchased and sold the property in a period of 12 months, the net capital gain gets added to the taxable income. It will raise the amount of income tax you will be paying. If you had possession of the property for more than a year before selling, you will get a 50 percent capital gains discount.

6. Building Depreciation:
Depending on when your property was constructed, you can claim a deduction on the depreciation of the building structure. You can also claim a deduction if you undertook any renovation on the property. You should have a clear idea about the allowable depreciation on rental property.

7. Stationary and Phone Expenses:
If you are a landlord, it is similar to running a business venture. You can claim deductions on phone costs, internet, electricity, stationary, etc. But, you must claim for that portion of these expenditures that relate to the investment property.

Conclusion:
You must have a clear idea of the various deductions that you can claim. As per the record of ATO, there are 1.9 million property investors residing in Australia. The country has a whopping 2.7 million rental investment properties. Every year, many property investors miss making claims of allowable tax deductions. It happens because they lack the awareness of all the expenditures they can claim as tax deductions. As a property investor, you should be aware of the tax deductions and Deppro depreciation to make the most of your investment property.

Best Reasons to Invest in Commercial Property

Most people dream of owning their own home. Those who can cross that first hurdle, often go on to their second or third home. Obviously, they do not plan to stay in all of them by turns. The subsequent purchases are for investment purposes only. They give the owner the option of renting or selling it outright for a profit. Additionally, whether you rent or sell, it also gives an option of claiming depreciation on property. There is another option that is popular with investors – commercial property. In this post, we are going to try to help you understand the implications of commercial property investment.

Tax Benefits

The first thing any investor looks at is whether a particular investment brings any relief from tax. A commercial investment property offers tax deductions in two ways. The first is on the capital works expenses made on immovable parts of the property. The second is the depreciation due to plant and equipment. This refers to additional fixtures and fittings that you have spent money on. If you can prepare an accurate and detailed depreciation schedule with the help of a professional, you can indeed save a lot of tax.

Robust Yields

The primary reason for any investment is to sell at a price higher than the purchase price. The property tax depreciation mentioned above is only a bonus. But it is not the most important benefit of investing in a commercial property. The most important benefit is the better returns it usually provides on resale. This is especially when you compare with the average returns of investing on a residential property. This is the primary reason why discerning real estate investors always prefer to deal in commercial properties.

Low Initial Investment

We know that the rental income from a commercial property would be much higher than a residential property. In spite of this, the initial cost of a commercial property is much less. This allows you to begin investing without a very large corpus.

Conclusion:

The purpose of this Deppro review is not to compare the relative merits of investing in a commercial property vs. residential property. We only seek to highlight some of the best reasons to invest in commercial property because many of them are less known to investors. If you are an investor, then you must surely keep commercial properties as part of your portfolio.

Why the Depreciation Shake-up Gives Off-the-plan Investors an Edge at Tax Time

The year 2017 saw some changes brought about in the rules governing depreciation on investment property in Australia. The attractive option for claiming tax deductions due to the depreciation of the property value saw a cutoff date being applied – 9th May 2017. People who bought a second-hand property after date could no longer claim the deductions, as per the ATO regulations.
An Overview of Depreciation

We know that any asset undergoes wear and tear as it continues to be used. Accounting principles look at this reduction as a standard percentage of the value which gets reduced from the value of the asset. Under tax laws, this depreciation amount could be set off as a deduction from the tax payable. This would make a substantial change in the cash flows of a property owner. Based on the cost of the property, maintenance costs, reduction in value, and the reduction in tax payable, the depreciation could impact the net yield on investment property.
The New Tax Law

From May 9th onwards in the year 2017, second-hand property purchased would not attract the tax deduction. The only two categories allowable were new assets added to older homes and assets in new homes would allow admissible deductions. Those who were off this new plan could continue to claim under old rules. Also, capital works investments and fixed items added could still be claimed. But any assets that came along with the property went out of the purview of the deduction.
The Better Option between New and Second Hand

Because of this change, property owners needed to rethink their investment strategy. Back of the envelop calculations seem to present a clear picture. It was seen that a new property could work out much cheaper than investing in an older property of the same value. The detailed working of the investment property depreciation schedule ATO would provide a similar answer. What this does is to take the tax benefits out of the equation. So an investor should look at the cost-benefit analysis of the property only. Tax deduction benefits would cease to make a difference to the numbers. So how do the new tax rules affect the comparison between old and new? A property purchased in 2016 might turn out to be of similar value to a brand new property purchased in 2018. This needs investors to recalibrate their calculations carefully and in advance.
Conclusion:

In order to get the best property investment returns, an investor would need to calculate carefully. The best way is to leave it to the professionals. Consultants like Deppro could depute their qualified quantity surveyors to get the math right. They would set up the depreciation schedule according to the purchase date. The ATO has detailed lists of what can be claimed and for how much. These quantity surveyors would work out the numbers in accordance with these ATO guidelines. The amount that such a report would cost could ensure savings of higher amount if the calculations are done by a professional.

10 Things You Need To Tick Off Before You Buy an Investment Property

When you are in a situation where you are able to put money into an investment property, it’s an extremely exciting time. But if not thought out properly, such an investment could actually push you into financial stress which could lead to mental distress as well. To help you out, here is a quick list of 10 things presented by Deppro Qld that you need to do before and during the purchase of property investment.

  1. Plan well: This is so obvious that it shouldn’t be on this list at all. But lack of planning can cause are series of losses you want to avoid. Things like the location you’re looking to buy at, how much you can afford to spend, who will manage your property, loan implications, property tax depreciation etc need to be well thought out.
  1. Consult experts: The first set of people we talk to are our friends and family in the process of decision making. We all like to be able to find someone who has their own investment property. But in order to ensure that your investment property actually provides good returns, you need to take the advice of experts like Deppro Qld.
  1. Insure yourself: Assuming that you would need a loan when buying your property, make sure that you have insurance coverage so that your family is not thrown into the deep end if something happens to you.

 

  1. Think like an investor: When it is time to choose your property, try putting yourself in the shoes of the person who would rent it from you.

 

  1. Do your research: You need to be sure about the going rates for not only the properties similar to what you are buying, but also be aware of tax implications of the fixtures and fittings you are using so that you can claim tax deductions on your property depreciation reports.

 

  1. Backup: Buying an investment property is similar to buying a car. You need to have money for the purchase, but you also need to keep a little aside for regular expenses like repairs and utility bills.

 

  1. Sharpen expenses: When you are investing in a property, remember that it is a medium to long term financial investment. Try to bring in some fiscal discipline on other fronts like credit card expenses or other ad hoc expenses.

 

  1. Keep the target in mind: You should spend on your property according to the location of the property and the likely tenants/buyers who would rent/buy from you. If the property is in a high-class neighborhood, for instance, invest in a pool, but otherwise, avoid those sorts of expenses.

 

  1. Choose the right entity: In case you are already burdened with tax commitments, consider buying in the name of a trust fund or get your spouse to buy it. That way you would be able to get the maximum benefit from the depreciation on investment property.

 

  1. Use the laws: When people are considering an investment property, they often use available funds to buy outright. Even if you have your funds, try investing that in a better instrument, and offset your interest expenses by the tax deductions available through law.

Like I said earlier it’s always a great feeling, whether you are planning to purchase your 1st, 2nd or 10th property. So, plan well and prepare yourself completely before your investment.

Do You Really Need A Quantity Surveyor?

Every team engaged in construction has different specialists with different skillsets. One of the most important and interesting roles is that of a quantity surveyor. This role combines the knowledge of engineering and finance. People argue whether all construction projects need a project surveyor or not. In our opinion, every project should have one. But there is another area of work where the role of quantity surveyors is even less understood.

Tax Returns and Quantity Surveyors

Australian tax rules state that owners of investment properties should file tax returns. This process requires qualified and experienced tax depreciation surveyors. So, let us properly understand the process of property tax. This way, the importance of quantity surveyors can become clearer as well.

When you own a property, there are two types of additions to that property.

  • The first is capital goods, which indicates the permanent structures.
  • The second refers to the extra items which are removable.

Good tax depreciation quantity surveyors can list all the elements of your property. After this, they distribute them into these two categories.

The Contribution of Tax Surveyor in Filing Tax Returns

The reason we need quantity surveyors for this is not only to create a list. With their training and experience, they would be able to put the correct pricing on each item. They can also calculate the depreciation allowable on each item. This would be according to Australian tax rules. Based on the quantity survey, the quantity surveyor tax depreciation list gets created. It is then made part of the owner’s tax returns. The right work by the quantity surveyor would ensure that tax is not paid when unnecessary. It also ensures nothing important is missed during the filing of returns.

The Importance of a Quantity Surveyor

This was only an example of a specific job that is impossible without a quantity surveyor. If a non-qualified person does it, there could be financial and legal implications. But if we talk about general construction teams as well, we can’t ignore the role of a quantity surveyor.

Conclusion:

The cost and efforts involved with hiring qualified Deppro quantity surveyors might be high but they get repaid because of their contributions. This holds true not only in general construction work. It is especially true in specific jobs like tax returns and depreciation lists. The benefits of hiring a professional quantity surveyor are most usually in financial aspects. But they also help in ensuring that the technical aspects are correct too. If your project team does not have a quantity surveyor yet, it is high time you consider it.

What You Need to Know About the Legislation Changes to Rental Property Tax Depreciation Claims

It’s always quite confusing to adapt to new changes. Similar to the altered legislation to the rental home returns which were observed in 2017. It has been tracked that numerous investors and rental property owners have issues regarding the claims available for them.
To everyone’s relief, what is worth appreciation is that the items under the Capital Works such as the swimming pools, toilets, windows, foundations, walls, and ceilings can be claimed for deductions just like before. There are no changes made to that category.
The alteration has been in Division 40 which includes the subparts of Plant and Equipment category including the electronic appliances, carpets, alarms etc. These are the assets which are extra, in other words, which aren’t a part of the built of the property.
Which Properties Got Affected by The Change?
Well, when summarized, it can be said that the deductions for the above-mentioned category that is the Plant and Equipment is not applicable on the condition that the property was made second hand after 7:30 pm on May 9, 2017. All the investors who have invested in the second-hand property before the mentioned time and date can claim returns on depreciation residential rental property as they used to before.
Also, if a new Plant and Equipment asset is bought after the specified date, it is applicable for claims until the asset’s life remains effective. Lastly, another notable fact is that the investors residing in their building before July 1, 2017, do not have to think about the changes made in the legislation as they are exempted from it.
How to Claim the Right Returns Efficiently?
Sometimes technical terms become quite difficult to understand and analyze and hence it is better to seek professional help rather than trying to be the jack of all trades and master of none. Hence, creating a tax depreciation schedule for a rental property can be extremely easy if done by an experienced, professional quantity surveyor. A person with that profession knows exactly what is to be done for your property and will help you extract maximum benefits by giving you a clear-cut view of your costs, expenditures, and returns.
There are a number of companies providing professional help to people in need of a good tax depreciation schedule and hence you can look out for one such service provider.
The main advantage of choosing this way is that they have immense knowledge about the concerned topic and they are aware of such minor details which can fill up your pockets and make you feel rich by just paying a humble fee for the service.
What after June 30, 2017?
For your information, even if it is past June 30, 2017, you are eligible to calculate depreciation on rental property and submit a tax schedule with your tax returns for 2017-2018. Hence, it’s a win-win situation for many of the investors.
Deriving complete information of such legislative changes isn’t a cup of tea and might leave you confused and unsure of your action despite the hard efforts. Thus, a little bit of assistance and help is never harmful.

Is it Worth Obtaining a Quantity Surveyor Report?

Have you invested in a rental property in Australia which was built in a year preceding 1987? If so, then things might be different for you than for those who bought their property in the following years. You may be confused in regards to getting a tax depreciation report from one of the qualified tax depreciation surveyors in your city.

Is obtaining a quantity surveyor’s report worth the effort, time and money? Read on to find out.

What Does a Depreciation Schedule Involve?

A quantity surveyor is a dedicated professional who works on depreciation schedules and the capital allowance of investors. When they complete both, it includes two essential elements: equipment depreciation and capital work deductions.

What Is Capital Works Deduction and Why Is It Important?

Capital works deduction is a form of tax deduction which relates to the structural aspects of a building. These include irremovable or fixed assets like tiles, doors, sinks, windows, walls, roof, etc.

Because it is next to impossible to remove these assets, capital works deduction, in the tax depreciation reports, assumes its importance. This prevents an investor from feeling the pinch on their finances at the subsequent stages.

Is there any Hard-and-Fast-Rule Related to Quantity Surveyors which one Needs to keep in Mind?

For the successful generation of these reports, it is imperative that tax depreciation quantity surveyors, who undertake the responsibility, are registered tax agents. This is all the more important in view of the fact that the information in the document relates to particular tax advice.

How Getting A Quantity Surveyor’s Report Helps?

According to the current version of tax legislation in Australia, any residential or commercial property built before September 15, 1987, and July 20, 1982, respectively, are not eligible for deduction.

As a result, an investor may not even consider the need to obtain a surveyor’s report if their date of purchase of property does not make them eligible for it.

However, it is a good idea to enquire about the possibility for a deduction, even if the property in question is 100 hundred years old. Owners of old properties carry out renovations more often than not, and this makes an investor eligible to make depreciation claims after its purchase.

A new buyer can file a claim for it in the event the previous owner carries out any repair or renovations on it after the aforementioned dates for residential and commercial properties.

So, as you would have come to know, getting a depreciation report is your best bet to make a claim for it in a timely manner.

Whether it is ATO guidelines or other tax depreciation laws in Australia, things keep changing from time to time. Therefore, it is a good idea to get in touch with depreciation service firms such as Deppro Perth. While you may spend a little in terms of fees, the dividends it may pay can make it worth the investment.