I N V E ST ME N T D E P R E C I AT I O N
HOW TO GET THE MOST OUT OF YOUR INVESTMENT PROPERTY If you're an Australian property investor, you'll want to make sure you're getting the most out of your investment. A property investment depreciation schedule can help you do just that! In this article, we'll guide you
to property investors because you
Depreciation is the natural wear
through the ins and out of
don’t need to spend any additional
and tear of a property and its assets
depreciation, what a depreciation
money to claim it, unlike other
over time. While all properties
schedule is and the benefits it can
deductions where money needs to
depreciate, only property investors
bring you – especially at tax time!
be spent like interest and insurance.
can claim it as a tax deduction.
WHAT IS DEPRECIATION? Depreciation is an often overlooked but important aspect of owning an investment property, so it's important to understand how it works. Depreciation is the biggest noncash property deduction available
Depreciation allows investors to D EPRECIATION IS THE SECOND LARGEST TAX DEDUCTION
recover the cost of their investment property over time.
AVAILABLE TO PROPERTY
Tax depreciation deductions are
INVESTORS AFTER LOAN
split into two categories:
INTEREST, YET 80% OF PEOPLE FAIL TO TAKE FULL ADVANTAGE OF IT.
• Capital works deductions • Plant and equipment depreciation Capital works deductions refer to your building’s structure and items that are permanently fixed within the property such as kitchen cupboards, doors and sinks. Capital works typically make up between 85-90% of the total deductions claim. Some example of items that can be claimed are: • Built-in kitchen cupboards • Doors, locks and door handles • Clothes lines • Bricks, mortar, walls, flooring and wiring • Driveways • Fences and retaining walls
C21 MARKET PULSE
12
CENTURY 21
