Investment Property Tax Allowances (Australia): The Basics

The Key To Profiting From Your Property Investment

Many property owners are losing potential tax 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.

Some of the key points regarding depreciation of investment properties include;

Any building irrespective of age will attract some claim for depreciation with respect to the plant & equipment items contained within the property including air conditioning, carpets, light fittings, etc;

As a general rule any property constructed after 17 July 1985 (residential) and 19 July 1982 (non-residential) is eligible for the construction write off allowance;

Any property having had additions or refurbishments undertaken after 17 July 1985 (residential) and 19 July 1982 (non-residential) may be eligible for a construction write off allowance;

All external works including fencing, paving, pergolas, garden sheds etc constructed after 26 February 1992 will attract the building write off allowance;

Depreciation and capital allowances can be backdated/amended for up to four years if previously unclaimed or not maximised.

The depreciation potential of an individual building will differ greatly depending on its age, use and original construction cost. The maximisation of a depreciation claim on any building requires a unique combination of construction costing skills and experience combined with an intimate knowledge of the Income Tax Assessment Act 1997. BMT & ASSOC can ensure that you obtain the maximum depreciation potential available from your investment property.

Engaging a specialist to maximise depreciation is beneficial at a number of stages in the property life cycle including;

purchase of an existing building;

completion of a new building; and

professional assessment of currently held property.

BMT & ASSOC as Quantity Surveyors are recognised by the Australian Tax Office under TR 97/25 as appropriately qualified to estimate construction costs of a building for tax purposes. In addition to this Australian Tax Office requirement, we specialise in maximising depreciation deductions for investment property owners.

Article supplied by BMT & ASSOC Pty Ltd. Should you have any queries please contact David Babic at BMT & ASSOC on 02 9241 6477.