By BMT Quantity Surveyors | www.bmtqs.com.au | Submitted May 2009 Many property owners are losing potential credits by failing to take full advantage of a property’s tax depreciation potential. Tax depreciation is available to any property owner who obtains assessable income by way of rent or operates a business from a property. Answers to some of the key questions asked regarding depreciation of investment property are: 1. As a general rule any property constructed after 17 July 1985 (residential) and 20 July 1982 (non-residential) is eligible for the construction write-off allowance; 2. All buildings, regardless of age, will attract depreciation and the building write-off allowance if refurbishment works have been undertaken since 17 July 1985 (residential) and 20 July 1982 (non-residential); 3. All external works including fencing, paving, pergolas, garden sheds etc constructed after February 1992 will attract the building write-off allowance; 4. A depreciation report can be prepared to allow a client to easily recover missed depreciation benefits (up to a period of four years) by amending previous tax returns. All types of income producing properties have substantial taxation benefits, over and above negative gearing, that the owner is entitled to claim as a tax credit. Any property, which is either rented or used for income producing purposes, is eligible to be depreciated. In order to maximise the tax benefit a particular property will attract, the owner will require the services of a recognised property tax depreciation expert with specific construction costing skills and experience. Tax legislation recognises only certain professionals within the construction industry as having the relevant qualifications to estimate the cost of building components for tax depreciation purposes. BMT Tax Depreciation, as property depreciation consultants, are recognised by the Australian Taxation Office as having the expert qualifications and experience to produce estimates of construction costs. The process of maximising a depreciation claim is based on an intimate understanding of the Income Tax Assessment Act, applicable Income Tax Rulings, Case Law and specific construction costing skills. Each property scenario is different and must be analysed by a specialist to optimise the depreciation benefits. As well as maximising your depreciation claim, BMT Tax Depreciation guarantee to find the investor double our fee worth of depreciation deductions in the first full financial year claim, or there will be no cost for the report.
