Tax Depreciation

5 Hidden Tax Deductions In An Investment Property

Investment properties often contain tens of thousands of dollars’ worth of tax deductions that can only be detected by a trained eye.

According to BMT Tax Depreciation,tax deductions can be concealedbehind walls, in ceilings, underfloors and on rooves. The combinedvalue of these deductions can reachtens of thousands of dollars overtheir lifetimes and make a significantdifference to a property investor’sbottom line.

FIRST, WHAT IS PROPERTY DEPRECIATION?

Depreciation is the natural wear andtear of a property and the assetswithin it over time. The AustralianTaxation Office allows ownersof income-producing propertiesto claim this as a tax deduction.Depreciation is the second biggesttax deduction available to propertyinvestors after loan interest, and canbe claimed for up to forty years.

FIVE HIDDEN DEDUCTIONS EASILY MISSED IN AN INVESTMENT PROPERTY

1. Underfloor heating

Underfloor heating is commonlyoverlooked but can yield deductions of up to $10,000 for an a veragesized house.

2. Re-stumping a home

Re-stumping, also known as re‐blocking, is re-setting (or replacing) the stumps on a house that use a stump subfloor. This is often necessary in older properties to replace damaged wood or due to soil movement. Re-stumping a house can produce a depreciation deduction in the range of $13,000.

3. Inconspicuous re-wiring and re-plumbing

Inconspicuous re-wiring and replumbing may also be required for an older or damaged property. Improvements like this can fetch a total depreciation deduction of $16,000. Regardless of whether these improvements were completed by a previous owner, the current owner is still eligible to claim them.

4. Solar pool heating

Often tucked away on the roof, solar pool heating is commonly missed but can produce a total depreciation deduction of around $7,000.

5. Sewage treatment assets and tanks

While it’s common for rural properties to have their own sewerage treatment assets and tanks, they can go unnoticed as they are unseen. Underground sewerage treatment tanks and piping can produce a total depreciation deduction of $11,600.

Almost every inch of a property is depreciable. A site inspection is required to ensure the maximum amount of depreciation is claimed, accurately.

Claiming maximised depreciation deductions is essential to boosting cash flow and ultimately optimising a property portfolio. Failing to claim these deductions can mean missing out on thousands of dollars annually.

BMT Tax Depreciation’s expert staff conduct physical site inspections to accurately identify both the obvious and unseen depreciable items.

To learn more about hidden deductions in an investment property call BMT on 1300 728 726 or Request a Quote.

Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit bmtqs.com.au for Australia-wide service.