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Property Tax Facts Depreciation Assets – What you need to know…

Property Tax Facts Depreciation Assets – What you need to know… 

We’re continuing our educational series to help property investors understand the value of depreciation. Residential properties leased for long term rentals or short holiday stays are eligible for depreciation allowances. Newly built properties such as free-standing houses, townhouses, or apartments that include assets can claim allowances for the Building (Division 43) and Plant & Equipment (Division 40). But owners of older or second-hand properties (acquired since 9th May 2017) can ONLY claim the Building allowance. Unless, they have purchased NEW Plant and Equipment assets, then they can claim Division 40 on these items as well.   

Even with the restrictions on older properties, there are substantial tax advantages, to be claimed for residential investment property each year.  

Here’s an example of how much an investor could save through depreciation allowances on a newly constructed apartment. 

Our client Tom purchased a newly built two-bedroom apartment with white goods included for $700,000. We prepared a comprehensive depreciation schedule that includes itemised values on the building and assets eligible under Division 40 and Division 43.  These include shared assets such as lift, and outdoor entertainment area. Overall, Tom can claim over $16,000 in depreciation deductions for the first year. Over the next five years, Tom would save approximately $71,500 through depreciation allowances. These deductions will help Tom offset rental income and manage his cash flow in the future.

If you are unsure, that your depreciation schedule includes all eligible deductions, below is a list of the most commonly claimed plant and equipment assets.

  • ovens and cooktops   
  • kitchen rangehoods  
  • dishwasher
  • refrigeration – full fridges, wine coolers, mini fridges 
  • appliances – microwaves, coffee machines, television
  • indoor furniture – couches, tables, free-standing cabinets, lamps
  • beds
  • carpets, rugs 
  • blinds, curtains, shutters
  • washing machines and dryers
  • security systems, alarms / CCTV
  • air conditioning units, ducted aircon, ceiling fans 
  • BBQ, outdoor/ kitchens cooktops 
  • outdoor furniture, tables, chairs, lounge 
  • pool equipment / pumps / filters/ covers
  • tennis courts equipment, nets, chairs, lights 
  • gym equipment
  • hot water systems
  • storage bays
  • lifts 
  • car stackers 

Also, a reminder that our depreciation schedules are prepared by qualified Property Tax Analysts and Quantity Surveyors who are Registered Tax Agents. Our depreciation reports are 100% tax deductible.  

Like Tom, reap the rewards of huge tax savings and claim property depreciation. Contact our experienced Property Tax team today. All property inspections comply with COVID safety guidelines.