Things To Know About Property Depreciation

 

Seasoned property investors know that depreciation will help your bottom line during tax time. In fact, many take depreciation into account before planning their next investment. But, property depreciation Sydney is not just for the pros. If you purchase a property for income-producing purposes, you are entitled to depreciate the building and the items within it against your assessable income.

 

What Is property depreciation Sydney?

property depreciation Sydney is a tax break that gives investors a chance to offset the decline of their investment property value from their taxable income. They can claim tax deductions on both the decline in value of the building structure, including the items permanently fixed to the property, as well as the decline in value of plant and equipment assets found inside it, for example, carpets, ovens, blinds, and dishwashers.

 

Not only does it help you pay less tax, but it is also a non-cash deduction, which means that you do not have to pay for it regularly. The deductions are built into the purchase price of the property. All other deductions like interest levies can hurt your pocket in the long run.

 

Do You Need Property Inspection?

An experienced quantity surveyor will make sure to note and photograph all depreciable items. This guarantees you will not miss out on any deductions. In the event of an audit, you can use the documentation as evidence.

 

It is quite common for quantity surveyors to liaise directly with the tenant or property manager to cause less disruption to the tenant. The best time to get a quantity surveyor to inspect your property is right after settlement and before the tenant has moved in.

 

Can I Still Claim After Renovating Your Property?

Yes, but you will need to determine how much you spent on renovations. This information is an ATO obligation to provide. In case the previous owner completed the renovations, you are still entitled to claim the property depreciation. In either case, a quantity surveyor is qualified to make that estimation where the cost of renovation is unknown.

 

Is Your Property Too Old To Claim Depreciation?

If your residential property was constructed after July 1985, you can claim both Building Allowance and Plant and Equipment. If construction on your property occurred before this date, you can only claim property depreciation on Plant and Equipment. However, it will still be worthwhile. Industrial and commercial properties are subject to different cut-off dates.

 

How Much Does Your Depreciation Schedule Cost?

The cost of preparing a tax depreciation schedule depends on a number of factors, including the type of property you have purchased, its size and location. Most quantity surveyors give a money-back guarantee, saving you twice your fee in the first year, or giving you the report for free. In other words, you have many deductions to gain and absolutely nothing to lose. Moreover, the fees of quantity surveyors are 100% tax-deductible.

 

Each property is different and many factors need to be considered when creating a property depreciation schedule.

 

Your depreciation schedule will take about 2 to 3 weeks to complete, as long as the quantity surveyor can inspect your property without any delays.