A tax depreciation schedule should be done on all investment properties in order to allow you to claim the depreciation of your investment property against your taxable income. When purchasing a property for the purpose of producing an income you are entitled to depreciate both the cost of the building itself and the items within the building against your income.
When investing in property it is important to contract a qualified quantity surveyor to inspect the property in order to produce a tax depreciation schedule report for your accountant. Many people are unaware of the benefits that can be gained by depreciation, offering substantial savings. A depreciation will help reduce tax payable on your earnings.
No matter the age of the property there are significant tax savings to be made by claiming depreciation. Construction dates can affect the amount that can be claimed as depreciation and this is why it is important to obtain a tax depreciation schedule to ensure that you can claim the true and maximum amount relating to your investment property. Construction dates can also affect who can estimate constructions costs to be used for depreciation, for example if a property is built after 1985 the Australian Tax Office (ATO) require that the tax depreciation schedule must be carried out by a licenced Quantity Surveyor. It is advisable to check the credentials of Quantity Surveyor carrying out your tax depreciation schedule to ensure they have accredited qualifications to comply with the ATO’s requirements.
The cost of a tax depreciation schedule can vary depending on such things as the type of property, size of the property and other factors so it is advisable to obtain a few quotes for this service. It is important to note that the quantity surveyor’s fees for the tax depreciation schedule is 100% tax deductable. It is also important to note that if you have not made claims in previous years, it may not be too late as once you have your tax depreciation schedule your accountant may be able to amend previous tax returns up to two years prior, however your tax agent or the ATO can clarify this depending on your specific circumstances.
Property Care Connect can connect you with quantity surveyor that services your area and who can provide you with a tax depreciation schedule.