Property is a good choice for an investment as it is less prone to risk. It can be profitable if you take the time and make the effort. You will overcome the rigors of the property investment territory if have a vivid vision of your goals. An investment property calculator will help you to estimate the costs of your property investment and the yields you can expect. It’s important to understand the deductions you are entitled to as it can significantly safeguard your cash flow.
These are four major insights when it comes to depreciation.
1. Itemize all repairs and maintenance expenses
Keep on top of all repairs and maintenance expenditures during the year. You can itemize them on a spreadsheet as they happen to make sure you don’t miss anything. Recording these expenses and the type of repair will make it easy to identify what isdepreciable and which are deductible.
Not all depreciation allowances can be claimed at the same rate or over the same timeframe. It’s dependent on what type of repair was undertaken. Provide detailed information when recording any repair and maintenance expenses to maximize your depreciation claim.
2. Old properties Can also Be Depreciated
Many investors inMelbournethink that a property constructed for 30 years does not warrant a depreciation schedule, but this is not always the case. Properties constructed after July 1985 can claim depreciation. Consequently, older investment properties extended or renovated since that time also claim deductions. Most, even in Brisbane,havebenefitted from new kitchens and bathrooms to bring the property up to modern standards. You can claim something with new fixtures and fittings whether you made them or they were the work of a former owner.
3. Scrapping schedule
When you renovate, you are permitted to write off any unclaimed depreciation on the fittings thrown out. This applies when part of the building is being demolished. All you needto generate taxable income before the renovations is to have used the premises as an investment property. A scrapping schedule is prepared by a quantity surveyor like DEPPRO Pty ltd. It should show the amounts not yet claimed on such items.
4. You may be entitled to a retrospective claim
Failure to make a claim in a particular year does not mean you will never be able to do so. You can access up to two years’ worth of deductions, but it’s important not to let it go too long. This will help you not miss out on some significant depreciation benefits.
Depreciation on an investment property will help you to maximize your returns. The above issues will ensure your cash flow is boosted significantly. You will have set your priorities right and created a sound long-term financial strategy.
At DEPPRO PTY ltd, we remove ownership anxiety by simplifying the complexity of depreciation. We offer stress-free services that help you maximize your property returns. We also advise on the rewards of claiming depreciation and how to do it. Contact us today so we can offer support when you need it.