Missed tax deductions add up

Market Insights
6 years ago
2 minutes

Buying an off the plan apartment as an investment property means you don’t have many hassles by way of repairs and maintenance during the first few years.

This is great news financially. But there may be even more ways you could be saving money on your investment. In particular, there are a number of items and assets within your investment property that you can claim depreciation against when it comes to your tax return.

The below table from our friends at BMT Tax Depreciation highlights the many assets within an apartment that they have identified as opportunities to save even more come tax time.

Says Jo Ward of BMT, “Although many of these items have a low depreciable value, the depreciation deductions which can be claimed for these items can add up to thousands of dollars for an investor.”

She added, “A specialist Quantity Surveyor will use their expert knowledge of tax legislation to ensure the maximum deductions are claimed for each individual asset.”

Here are BMT’s tips to help investors make sure they don’t miss items and maximise their depreciation deductions:

1. Take note of the assets included in the table below

2. If you have a depreciation schedule and you own any of these assets, confirm with your Accountant that they are included in your schedule and your depreciation claim. If items have been missed, the Australian Taxation Office will allow you to go back and amend the previous two years of missed deductions

3. If you don’t have a depreciation schedule you should talk to a specialist Quantity Surveyor as soon as possible

4. Ensure your specialist Quantity Surveyor can outline the deductions available for assets which are eligible* to be written off immediately or added to the low-value pool

The next time you speak to your tax advisor about your property investment, arm yourself with this table and you could claim more than you think.


*Under proposed changes outlined in draft legislation (section 2 of Treasury Laws Amendment Bill 2017), investors who exchange contracts on a second hand residential property after 7:30pm on 9th May 2017 will no longer be able to claim depreciation on plant and equipment assets. Investors who purchased prior to this date and those who purchase a brand new property will still be able to claim depreciation as they were previously. BMT Tax Depreciation will be making an official submission outlining our concerns along with suggestions of alternative methods to better resolve the Government’s integrity issue. To learn more visit www.bmtqs.com.au/budget-2017.