Why You Need a Depreciation Schedule for Your Investment Property
Savvy investors, nowadays, indulge in property investment with the prospect of re-selling the property at higher prices. While this investment decision is highly fruitful, a little know-how of the field can help in making the most of the opportunity.
Depreciation on property is one such aspect that has to be taken into consideration. With the know-how of property depreciation, information on tax depreciation schedules is also vital.
What is a Tax Depreciation Schedule?
Depreciation on a property comes from the fact that as a property ages, its components may suffer from wear and tear. The test of time inflicted upon the property leads to a decline in value. Tax Office provides claim to investors against this depreciation.
In order to claim depreciation from the Tax Office, investors require preparation of investment property depreciation schedule also known as a tax depreciation schedule. The preparation of the schedule should be done by a qualified surveyor, who will make a list of all the depreciable items in the property.
The inclusions in the depreciation schedule will be: depreciation on building allowance; depreciation on equipment; on plant; and, precise calculation of each depreciable item. Depreciation on investment property ATO approval is a must. For which you need professional help to draft it for you.
Preparing a Depreciation Schedule
Property depreciation schedule 80 reflects the numerous benefits of having your property’s depreciation schedule developed, which are as follows:
- Creation of tax depreciation schedules on a rental property allows the owner of the property to claim renovations done by the previous owner. The owner can also add any new improvement made on the house into the existing schedule.
- Beside the approval of claim, the preparation of schedules allows the owner to weigh their subsequent property investments. Investment property calculator can help them to find out the most lucrative properties in terms of depreciation benefits.
- Preparation of Property depreciation schedule 80 allows the owner to claim depreciation on building allowance. This means that the owner will get tax benefits upon the building’s structure like the brickwork, roof and timber work.
- Depreciation on plant and equipment can become highly lucrative with the aid of depreciation schedules. This is because it covers those items that can be detached from the investment property. Such items cover as high as 35% of the complete cost of a residential building
- The benefits of tax depreciation schedules also include improvement of cash flow. This is owing to the reduction of taxable income. Wealth creation gets much easier when the money has been freed up. These further properties can of course be weighed using Investment property calculator.
Wrapping-Up:
It’s the owner’s responsibility to both deduct the depreciating value upon their property as well to claim it. It is not the ATO’s job to remind them. Depreciation on investment property ATO can be a game-changer for an owner’s investment opportunities. Also, property owners should not forget to use the aid of a qualified quantity surveyor for creation of the schedule on their investment property like Deppro QLD.
