Depreciation enables you to claim tax deductions for wear and tear over time, on your investment property.
Property depreciation is also known as a "non cash deduction”, which means that you don’t have to spend money to claim a deduction.
Depreciation also covers plant and equipment ie air-conditioners and carpets etc, even if they were originally installed by a previous owner.
Depreciation recognises that the property will become worn out over time and will eventually need to be replaced.
Depreciation reduces your taxable income and the specific amounts, depend on the age of your property and other variables
A depreciation schedule is prepared by a quantity surveyor to ensure that you are maximising the return from your investment each year.
You will only need to get a depreciation schedule once and it should contain expected amounts of depreciation for up to 40 years.
The cost of the report is tax deductible and the best time to get the schedule created is on settlement.
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Wednesday, 14 August 2019