Get A Quantity Surveyor’s Depreciation Report When Investing In Property In Brisbane
You can rarely go wrong with long-term property investment, and it provides both a monthly income from rent and a capital return when sold. The Government has recently made changes to the tax structure regarding residential properties, and, if handled correctly, these changes are a great boon when investing in property in Brisbane. We will quickly provide a synopsis of the important aspects and why consulting a property depreciation expert is vital.
Understanding What Tax Depreciation Is For Residential Properties
The government’s new tax obligation changes primarily affect investors in residential properties bought after May 9th of 2017. An investor can now only deduct expenses incurred for the maintenance, upkeep and improvement of the property. All the “plant and equipment” bought part and parcel with the property can no longer be depreciated and deducted from income tax.
The upside of this change is that improvements and new installations can be depreciated much faster than before. The result is more effective deductions for investors and thus higher net income from a rental property.
However, tax depreciation in Brisbane is not limited to newly acquired residential properties – old investments can also benefit from the services of a depreciation consultant. Any new renovations, repairs and plant and equipment installed on the property can be depreciated according to the approved rates and amounts.
The Importance of a Property Report for Brisbane Houses
There are several good reasons for having a property report compiled by a depreciation expert and accepted by the ATO. The first reason is the new rule that “second-hand” plant and equipment or removable items you bought with the house can no longer be depreciated for a tax benefit. However, armed with a comprehensive list and valuations of these items for when you bought the house, the current value of the plant and equipment can be offset against capital gains tax (CGT) when you sell the property. This is because CGT is not always based on the total cost of the residential property – it can also be calculated on a schedule of the parts constituting the whole of the purchase price.
The second reason for having a comprehensive property report compiled is that it allows the investor to track the property’s value changes over the years. Simply buying a property, doing yearly maintenance and then selling it for a perceived profit is not a very sound investment strategy. The cost of maintenance must always be deducted from the selling price to calculate the true profit. You can also realise a higher profit by keeping track of property depreciation in Brisbane and submitting the allowed tax deduction each year.
The Requirements for A Depreciation Schedule
The Requirements for A Depreciation Schedule
The ATO requires that a qualified quantity surveyor compiles all the depreciation schedules and reports. Our quantity surveyor in Brisbane personally inspects all properties to determine the value of the capital works and the plant and equipment. The report reflects the value of the property accurately. From this information, we compile the depreciation schedule for Brisbane properties for submission to the ATO each year.
Our schedule for the depreciation of capital works is spread over 40 years, whereas the schedule for the plant and equipment follows the strict guidelines set out by the ATO.
DEPPRO is one of the largest firms in Australia, dedicated to property depreciation reports. We have been assisting investors for more than 12 years with accurately submitting their tax forms to the ATO. We are active in Brisbane and all other cities and towns in the country. Our tax accountants and quantity surveyors perform all assessments, and we never subcontract any work.
Contact us to discuss how we can assist you with submitting a profitable depreciation schedule to the ATO.
