A tax depreciation schedule enables property investors to depreciate or deduct the original cost of property, equipment and capital works such as renovations each financial year, accumulated over the life of the item.
Is Tax Depreciation a Legitimate Write Off?
The Australian Taxation Office thoroughly acknowledges that the original value of an asset gradually decreases over the time and allows for legitimate tax deductions or depreciation of the item.
What Depreciation am I Eligible For?
If you are an investment property owner, you are eligible for depreciation under two categories: Plant and Equipment and Capital Works.
Different items carry different rates according to their life term. A qualified inspector can help you determine which items are depreciable to realise your savings.
In order to claim tax benefits on a property, investors must complete an ATO compliance report.
What is an ATO Compliance Report?
An ATO compliance report is a depreciation schedule that enables investors to deduct write off claims for new and existing properties for intensive tax purposes. This report can also be used to calculate the amount you can depreciate on your tax return each year based on your allowances.
For maximum tax benefits, investors can utilise a tax property depreciation report which allows write offs for capital works and plant and equipment depreciation over a 40 year period.
How Do Investors Benefit From Tax Depreciation?
Tax depreciation increases property value by affording investors maximum returns on their investments.
Depreciation also helps investors reduce their taxable income so they pay less taxes and increase cash flow, namely, when utilised in conjunction with factors such as maintenance and repairs and mortgage interest etc. This savings can then be used towards other factors such as debt reduction.
How Is Property Inspected for Depreciation Reports?
During the inspection, highly experienced and knowledgeable inspectors will perform a walk-through of the property to assess which items are depreciable to help investors realise their savings.
BPI Toowoomba Tax Depreciation Schedules
BPI offers tax depreciation schedules for all our clients. Call us today to arrange your next investment property tax depreciation schedule.