Better Late than Never; Take Advantage of Depreciation Allowances Now!
Recently, our Property Tax Team prepared a depreciation schedule for our clients who purchased a two-bedroom apartment in a residential complex at Rosebery, NSW. The apartment included access to swimming pool, sauna, gym, plus lift and underground carpark.
Our clients bought the property as an investment before the legislation change came into effect on 9th May 2017, so they were eligible to claim depreciation allowances for both the Building Division 43, and Plant & Equipment Division 40. But, hadn’t done so until now.
The apartment was built in 1996 and many of the Plant & Equipment assets had depreciated in value. Our Property Tax Team conducted a thorough inspection of the property to determine the condition of the assets and to prepare a detailed depreciation report.
On completion of the report, our Team found a total of $7,542 in depreciation deduction that could be claimed during the first full financial year. There would be a further $107,494 in total depreciation deductions, able to be claimed by our clients over the remaining 40 years.
Should our clients wish to amend previous tax returns and claim depreciation deductions since they purchased the property, they may be able to do this as well, with the help of their accountant.
Here are some of the items we valued in our report and were eligible for depreciation allowances.
- Air conditioning (room units and packaged units)
- Automatic entry systems and mechanical door closer
- Fire Control and alarms (smoke detectors, extinguishers, hoses, pumps)
- Floating timber floor coverings
- Furniture (outside free standing, BBQ)
- Garden equipment (watering systems, control panels, pumps and timing devices)
- Gymnasium equipment (cardiovascular, flooring)
- Hot water systems
- Kitchen (oven, stoves, exhaust and range hood, dishwasher)
- Washing machine and dryer
- Sauna and spa equipment (heating)
- Swimming pool equipment
- Vehicle control equipment (gates controls)
- Ventilation fans
As you can see there is an extensive list of items that our clients could have been claiming depreciation allowances, since they bought the property in 2010.
And, there is plenty of allowances still to claim. It’s definitely worth the time and small fee to obtain a comprehensive depreciation schedule.
Depreciation deductions allow you to offset rental income and reduce the total amount you need to pay on your personal income tax. Depending on your personal circumstances, you may find you can save thousands of dollars in taxes.
Apartment complexes will enable you to claim a share of common assets as well. These include items such as pool, gym and associated equipment, lifts and outdoor area, security systems and more.
As the saying goes, better late than never. We’ve very pleased to have helped our clients but encourage investors to NOT waste the opportunity and order your depreciation report today.