Capital allowance is often referred to in general terms within the property industry as Tax Depreciation.
Capital allowance is a tax deduction claimable for the decline in value (depreciation) of capital assets, such as your investment property.
For property investors, it means the deductions you can claim as an expense, for the ageing, wear and tear of your investment property and the included assets.
The best way for you to claim for capital allowance is to obtain a Capital Allowance and Tax Depreciation Schedule from a qualified, professional Quantity Surveyor, that holds registration as a Tax Agent with the Australian Taxation Practitioners Board.
Capital Claims Tax Depreciation are expert quantity surveyors, capital allowance and depreciation specialists and registered tax agents. We produce ATO compliant reports that will maximise the tax deductions available to you. Learn more about capital allowance and depreciation schedules.
Annual deductions for capital allowance and depreciation are typically thousands, and often tens of thousands of dollars, claimed each year you own the property, for up to 40 years.
Capital allowance and depreciation is one of the largest tax deductions claimed by property investors ever year. Claiming this deduction reduces taxable income and means less tax payable by the investor.
Owners of investment properties purchased second-hand can still claim capital allowance and depreciation on the constructed works - the original building (if it qualifies) and any structural improvements or additions made to the property over time.
The second-hand assets acquired through the purchase do not qualify for annual depreciation claims, however the cumulative value of depreciation over time is deductible from any capital gain made at sale and helps to reduce capital gains tax payable.
For this reason, our capital allowance and depreciation schedules always include the annual depreciation figures for both structural and included assets. The structural is claimable each year, and the total of the asset depreciation is claimable at sale.
If you have any questions about capital allowance and depreciation for your investment property, feel welcome to contact our friendly team during business hours on 1300 922 220. We can take a look at your property online and provide expert, personalised advice relevant to your property and circumstances.
For a free, no obligation estimate of the deductions you could be claiming for capital allowance and depreciation of your investment property click on the image below. Scroll further to find a link to download our eBook - 6 Facts every property investor should know about claiming depreciation.
If you own an investment property, the best way to ensure your depreciation deductions have been maximised is to use a depreciation schedule prepared by Capital Claims Tax Depreciation. For an estimate of deductions you may be entitled to, or to have your current depreciation schedule reviewed free of charge, please don't hesitate to get in touch 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