If you have purchased or want to purchase a brand-new house or unit, there are great tax depreciation deductions claimable to you!
You’re able to claim thousands in tax depreciation deductions for a brand-new house or unit, particularly if you do not live in it after the settlement date. For maximum deductions, a tenant must be the first person to live in your brand-new investment property, and if this is the case - You can claim tax depreciation deductions for the whole house or unit. Yes, you read that correctly. All of it!
You are entitled to claim for Division 40 – also known as ‘plant and equipment items’ (eg. stove, carpet, blinds, lights) and for Division 43 – also known as ‘structural component’ (eg. bricks, roof, walls, concrete, hard landscaping – fences, retaining walls, driveways).
80-90% of the tax depreciation deduction claim comes from Division 43 but together Division 40 and Division 43 total thousands of dollars in tax deductions which reduces your income tax payable. Tax depreciation is typically one of the largest deductions you can claim from the ATO for owning an investment property.
How do you claim your tax depreciation deduction? By ordering a tax depreciation schedule through us! When you receive your Capital Claims Tax Depreciation Schedule it will forecast the next forty-years of deductions for you. Your accountant will use the deductions that we generate as well as claiming the other deductions available to you (eg. insurances, fees, land rates). This will then reduce your income tax payable and hopefully get more money back in your pocket.
Below are three brand-new scenarios, a house, a unit in a small complex and a unit in a large complex and what tax depreciation deductions could be claimable:
A brand-new house as stated above can claim for Division 40 and Division 43. This brand-new 3 bedroom house can claim the following deductions:
A brand-new unit in a small complex as stated above can claim for Division 40 and Division 43 and can claim for common areas (eg. driveways, lighting, fire services, fences, gates, garbage bin area.)
This brand-new 1 bedroom unit can claim the following deductions:
A brand-new unit in a large complex as stated above can claim for Division 40 and Division 43 and can claim for common areas (eg. stairwells, gymnasium, pool, BBQ area, basements, corridors, lobbies, foyers, driveways).
This brand-new 2 bedroom plus study unit can claim the following deductions:
If you would like to know what tax depreciation deductions you are entitled to claim from your brand-new house or unit investment property, complete our FREE estimate form online here. Or you can call Alex our Senior Depreciation Specialist on 1300 922 200.
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