According to research, there are about 80% of property owners who do not claim their depreciation. What they don’t realize is that, this way the money they lose in taxes can be gained back. Even though some people know about property depreciation, they choose to ignore it. Still many others don’t even know about such tax deductions.
Property depreciation is the deduction in income tax of a property or asset due to the wear and tear caused by its continuous use. Australian Taxation Office (ATO) allows the owners of the property to claim the tax credit. It is called a ‘non-tax cash deduction’.
Many owners think that depreciation is only for properties that are new. Even though new properties are more beneficial, old properties too secure some tax deductions. The difference between old and new property tax deduction is that, new properties cause $8,500 more tax deduction than the old properties in the first year. But this does not mean that old properties are not worth depreciating. They still create tax deductions, which is better than no tax deduction!
Finding out what the depreciation of your property amount is not too difficult. Although the amount can be calculated on your own, it is highly advisable to appoint a trained and professional Quantity Surveyor. Also make sure that the company you hire is registered since ATO demands a compliant tax depreciation report. The calculations of a professional would be accurate and in accordance with the current market values.
When you hire a Quantity Supervisor, he will ask you a series of questions related to the property and then prepare a depreciation report that would be inspected by your specified accountant. This could mean that you acquire thousands of dollars without doing anything. So, if you haven’t claimed your depreciation, now is the time to do it.
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