A Tax Depreciation blog by Paul Bennion.
Most people when they decide to buy an investment property only look at the headline costs of the purchase i.e. the price of the home and mortgage repayments.
However, there are significant ongoing costs associated with owning an investment property such as property related taxes annually levelled by the State and Local Governments.
These property taxes can add up to thousands of dollars each year in holding costs for every property an investor owns.
The importance of these property taxes has been highlighted by recent ABS figures which show that last financial year State and Local Governments throughout Australia collected over $40 billion in property taxes.
Over the last decade these property taxes have jumped by nearly 70% from $24.23 billion to $40.85 billion.
These property taxes have been generally rising faster than the rate of inflation and as a result can eat into the cashflow of property investors.
This is particularly the case if an investor has several investment properties and is faced with multiple State and Local Government tax bills each year.
To help alleviate this tax burden, more Australians are taking advantage of legitimate tax benefits which flow from investing in property such as depreciation.
This why June and July are the busiest months of the year for DEPPRO as many property investors obtain tax depreciation reports for their investment properties to significantly reduce their taxable income.
Just one tax depreciation report for an investment property can generate thousands of dollars in potential savings in tax each year
Over the coming weeks, a large number of investors will be making decisions to buy investment properties throughout Australia to coincide with this period.
For people in Australia who buy an investment property, they have to understand that they must undertake a tax depreciation schedule as soon as possible after settlement so that it complies with ATO guidelines.
Because June and July is the busiest time of the year for DEPPRO and to assist clients so they have a prompt service even during these busiest months, we have an online ordering system at deppro.com.au.
Clients only have to enter limited information such as the post code of their property and they will get a quote for the tax depreciation schedule within a few seconds.
For the initial cost of the tax depreciation report – which is tax deductible, clients can achieve thousands of dollars in tax benefits each year from their investment by legitimately claiming their full depreciation allowances.
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 that they select a company that is fully compliant with ATO rulings, property investors should select a company that is a member of The Australian Institute of Quantity Surveyors (AIQS).
DEPPRO is an Associate Member of AIQS and uses systems that are fully compliant with ATO rulings.