Investment property depreciation scheduling is one of many options available to Australian property investors for saving on their tax. However, while this is a fantastic opportunity for property owners to put some of their tax money back into their investment, it’s one that isn’t particularly well understood. Today, we’re going to go through some of the most frequently asked questions regarding depreciation scheduling and help you figure out if you’re eligible for more tax-saving benefits.
Put simply, investment property depreciation allows you to offset a decline in an investment property’s value by using your taxable income in the form of a tax break. Aside from allowing you to claim property depreciation on the property itself, this tax break also factors in items that are considered a permanent fixture of that property, including the structure itself. This ensures that investment property owners have the financial means to ensure that their property is maintained and functional, which is especially helpful in cases of rental properties where frequent use and changes in tenants are consistent factors.
Trying to provide an estimated cost for an investment property depreciation report can be difficult, as the number can vary wildly, even within single quantity surveyor services. This is because being a quantity surveyor doesn’t mean a one-size-fits-all service, and you will often get what you pay for. Prices can often range between $275 and $800, and this tends to dictate how detailed your final report will be. Keep this in mind when deciding on your budgeting, as saving money in the short term may lead to fewer tax deductions, and therefore, more unnecessary expenditure over time.
The answer is yes, as long as you’re doing so for a property that is being used for income-producing purposes. Any residential property renovations or structural alterations that were completed after September 1987 that also adhere to the previous stipulations should be eligible for investment property depreciation.
The short answer is yes, absolutely. As a matter of fact, any residential property with a build date after July 1985 should be eligible for a variety of benefits, including Plant & Equipment and Building Allowance. Even for those that have properties built before this date, Plant & Equipment can still be claimed, which should still provide a considerable amount of value to both you and your property.
Although in-person inspections were an essential part of the investment property depreciation process in times past, at least for older properties, modern technological updates have also made virtual inspections a viable option. Whilst it is still a relatively new addition to the quantity surveying process, many firms that have adopted the process have found it to be a less invasive process that has few downsides when compared to traditional means of inspection.
This will depend on the specifics of your residential property. There are many depreciation calculators available for this purpose, so if you’re looking for a free estimate on what you will be able to save through property depreciation scheduling, this is a fantastic resource for doing so.
Once again, this can vary quite considerably, but most investment property depreciation schedules will take between two and three weeks to complete. This is assuming that there aren’t delays in the property inspection process.
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