We have written previously (and endlessly) about “The Budget Announcement” that was made in May 2017, and how some in our industry perceived it to be “doom and gloom”. We didn’t agree with that line of thought and believed it was a matter of time and adjustment. So, we continued to help educate clients where we could, and we waited for the shift to begin. We waited for the market to re-jig itself and adapt to the new ways of claiming tax depreciation and we are now starting to see that shift happen.
Property investors are adapting quickly and cementing themselves as savvy property investors. They are not willing to miss this opportunity and risk losing thousands and in many cases, they are not even waiting until tax time for their accountant to say, “you need a tax depreciation schedule.” They are ordering directly from us. They are prepared. They are switched on. They are educating themselves on what they need to do to get the most out of their investment property.
What we are seeing with property investors is a shift towards buying brand-new properties and commercial properties as the recent change to our industry doesn’t affect this type of investment. For a brand-new house or unit, approximate tax depreciation deductions for the first full financial year are usually over $11,000.
For property investors who are purchasing second-hand properties that are qualifying, they are still claiming great deductions due to the structural component, Division 43, that is claimable over a 40-year period. Most houses built in the late 80’s and early 90’s will generate over $2,000 per year in tax depreciation deductions. Even older properties that have had substantial renovations (e.g. kitchen, bathroom and paint) can generate great tax depreciation deductions.
And for property investors who aren’t sure if it’s worth it, they are calling us or emailing us to ask about the feasibility of ordering a tax depreciation schedule. With a simple conversation, they are saving thousands of dollars. They don’t want to be overpaying their taxes and want to claim every dollar they can to help with cash flow of owning an investment property.
Contact our friendly team to discuss your property and find out what depreciation deductions are available to you. We provide free, all-inclusive quotes and estimates of deductions up-front so you can feel confident before proceeding. Get in touch today on 1300 922 220.
Mark is an expert quantity surveyor, business owner, public speaker and property developer. With 20+ years experience in the construction and quantity surveying industry Mark’s specialist expertise have been sought in consultant capacity by professional bodies such as the National Institute of Accountants and the National Tax and Accountants Association, and he has presented at various property and tax seminars and expos nationwide. Mark holds a Bachelor of Construction Management from the University of Newcastle, is an affiliate member of the Australian Institute of Quantity Surveyors and a Registered Tax Agent.View all posts by Mark Wilkins