Maximising Tax Credits From Your Investment Property

Many property owners are losing potential credits by failing to take full advantage of a property’s tax depreciation potential. An often overlooked method of obtaining tax credits, property tax depreciation is available to any property owner who obtains assessable income by way of rent or operates a business from a property.

Answers to some of the key questions asked regarding depreciation of investment property are:

As a general rule any property constructed after 17 July 1985 (residential) and 20 July 1982 (non-residential) is eligible for the construction write-off allowance;

All buildings, regardless of age, will attract depreciation and the building write-off allowance if refurbishment works have been undertaken since 17 July 1985 (residential) and 20 July 1982 (non-residential);

All external works including fencing, paving, pergolas, garden sheds etc constructed after February 1992 will attract the building write-off allowance;

A depreciation report can be preparedto allow a client to easily recover missed depreciation benefits (up to a period of four years) by amending previous tax returns.

All types of income producing properties have substantial taxation benefits, over and above negative gearing, that the owner is entitled to claim as a tax credit. Any property, which is either rented or used for income producing purposes, is eligible to be depreciated.

In order to maximise the tax benefit a particular property will attract,the owner will require the services of a recognised property tax depreciation expert with specific construction costing skills and experience.

Tax legislation recognises only certain professionals within the construction industry as having the relevant qualifications to estimate the cost of building components for tax depreciation purposes.

The process of maximising a depreciation claim is based on an intimate understanding of the Income Tax Assessment Act, applicable Income Tax Rulings, Case Law and specific construction costing skills. Each property scenario is different and must be analysed by a specialist to optimise the depreciation benefits.

At AssetZ we have access to Australian wide depreciation specialists who will do a deprecation schedule ready prepared for your accountants and tax specialist,
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Advice Warning
Any advice provided in this publication should be considered General Advice as it does not take into account your personal needs and objectives or your financial circumstances. You should therefore consider these matters yourself before deciding whether the advice is appropriate for you and whether you should act upon it.