As a property investor, Tax Depreciation can really put thousands of dollars in your pockets every year. You may already know that there is simply “wear and tear” and that the ATO compensates you for an asset’s effective life. Some items can take up to 40 years to depreciate but others do so far more quickly. The real advantage is that you can get the windfall now, this year, not sometime in the future.
You need an ATO compliant Depreciation Schedule. There are many companies who offer such a service but they aren’t all equal. Your property manager knows the most competent ones and can assist you in choosing a trusted firm. Firms should adhere to the proper standards when it comes to inspector qualifications and always use a Quantity Surveyor. Avoid the gimmicks. Look for one that provides best qualified people & free after sales service and amendments, not the one with the cheapest fees or highest returns.
Depreciation is not as simple as some may presume. Many people do not realise, until it is too late, that they could depreciate their property or contents, sometimes missing out on years of benefits.
Get an “over the phone” obligation free estimate and quote. Then you will know in advance the value in proceeding and understand the costs involved with the process.
You may be pleasantly surprised with the results.
There are some misconceptions about what can be depreciated. Just because your newly purchased house is older, does not exclude you from receiving a windfall. A reasonable value can be ascribed to aged assets and renovations ensuring an immediate benefit in the first few years of investing.
Not every property requires an inspection. The aim of the inspection is to work out the construction cost and evaluate a list of depreciating assets. If you have this information in a contract the right firm will save you money and remove the need for an inspection Other advantages come through taking advantage of renovations or extra inclusions in your contents. The less expensive the installed item, the quicker the return as depreciation, as certain items can be depreciated fully in the first year. This is typical of furnishings. Make sure you are getting all the benefits you can.
Talk to your specialist property manager or accountant; you will be pleased with what you find out and how it aids your efforts to improve your wealth.
Article contributed by our friends at Depreciator