C21 Market Pulse | June 2022 | Australia

HOW TO GET THE MOST OUT OF YOUR INVESTMENT PROPERTY

In this article, we'll guide you through the ins and out of depreciation, what a depreciation schedule is and the benefits it can bring you – especially at tax time!

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 non-cash property deduction available to property investors because you don’t need to spend any additional money to claim it, unlike other deductions where money needs to be spent like interest and insurance.

DEPRECIATION IS THE SECOND LARGEST TAX DEDUCTION AVAILABLE TO PROPERTY INVESTORS AFTER LOAN INTEREST, YET 80% OF PEOPLE FAIL TO TAKE FULL ADVANTAGE OF IT.

Depreciation is the natural wear and tear of a property and its assets over time. While all properties depreciate, only property investors can claim it as a tax deduction. Depreciation allows investors to recover the cost of their investment property over time.

Tax depreciation deductions are split into two categories:

• 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

• Sinks, basins, baths and toilet bowls

Plant and equipment assets are items which are easily removable or mechanical in nature – property owners can claim depreciation for the wear and tear of these assets.

Some example of items that can be claimed are:

• Air-conditioning units

• Blinds and curtains

• Hot water systems, heaters, solar panels

• Security systems

• Light fittings

• Swimming pool filtration and cleaning systems

BENEFITS OF CLAIMING DEPRECIATION

There are several benefits toclaiming depreciation on yourinvestment property, including:

• Reducing your taxable income

• Maximising your returnon investment

• Lowering your tax liability

If you're looking to get the mostout of your investment property,a property investment depreciationschedule is a valuable tool.

WHAT IS A DEPRECIATION SCHEDULE?

A depreciation schedule is areport that outlines all availabletax depreciation deductions for aresidential investment propertyor commercial building. Mostproperties, new and old, havedepreciation available.

A well prepared schedule canprovide you with a 40 year forecastillustrating all depreciable itemsalong with both prime cost anddiminishing value methods ofdepreciation to help you decidewhich method is best for you.

You may also be able to claim back missed dollars by adjusting previous tax returns if your depreciation schedule identifies deductions you may have missed or haven’t claimed previously.

A PROPERTY TAX DEPRECIATION SCHEDULE LASTS THE LIFETIME OF THE PROPERTY AND IS AVAILABLE FOR A ONE-OFF FEE IS 100% TAX DEDUCTIBLE.

It is highly recommended you work with a company that specialises in preparing depreciation schedules for your property to really maximise the deductions you can make. They know every item that can be claimed, and just as importantly those that can’t be. They will also work with your tax accountant, saving you both time and hassle.`The one-off schedule fee you pay is 100% tax deductible and lasts the lifetime of the property.

EXCLUSIVE OFFER

At Century 21, we want you to get the most from your investment property, so we’ve partnered with Australian experts in property tax depreciation, BMT Tax Depreciation to provide you with an exclusive discount offer.

BMT is offering a reduced fee of $715 inc GST on single residential tax depreciation schedules (normally $770).

To claim this reduced schedule fee visit BMT Tax Depreciation today and enter promo code: CE11

If you order before June 30 and you can claim your fee back this financial year.

Note: Referral and affiliate fees are not sought or paid to anyone in the exchange of depreciation services. We receive no financial benefit for recommending BMT.