Savvy Investors of Koko at Broadbeach Reap High Depreciation Rewards
Residential holiday rentals are a staple component of property portfolios for many investors. With this type of investment, it’s crucial to ensure the property is available for rent for a significant portion of the time to take advantage of depreciation allowances and tax benefits.
Our NBtax team had the pleasure of inspecting the stunning new holiday apartments – Koko at Broadbeach, Queensland. Developed by the Morris Property Group, the Koko development is 31-storey with 98 apartments. Each floor contains only four apartments with two and three bedrooms available. The apartments feature contemporary stone kitchens with high end appliances.
Added benefits for tenants include a pool and lounge area, yoga lawn and modern gym, as well as a private outdoor entertainment area in the level 5 residents’ resort, plus a ground-floor café and reception. Property owners can claim a share of these assets as depreciation allowances.
A detailed analysis of the property including construction costs revealed up to $29,000 in a full year of depreciation deductions. During the life of the building and assets, investors can expect to receive a total of approximately $570,800 in depreciation deductions over 40 years. Typical high value deductions include:
- Air conditioners
- Carpets / rugs
- Fire control and alarm systems
- Hot water installation
- Kitchen appliances (dishwasher, exhaust fans and range hood, oven, stove)
- Free standing lights
- Furniture – BBQ, bedding and linen, internal furniture
- Window shutters
- Garbage disposal bins
- Automatic entry systems and mechanical door closers
Common shared assets include:
- Electric lifts
- Ventilations fans
- Gym equipment
- Swimming pool equipment
- Security systems – CCTV / access controls
- Outside furniture plus artificial grass and matting
The value attributed to each of these items will depend on their quality and age. Properties with new high end inclusions will be eligible for greater depreciation allowances.
As you can see the return for our client is significant. The more high value investment properties, the greater the depreciation deductions. And, the opportunity to reduce personal income tax by offsetting rental income.
To take advantage of depreciation deductions for your rental property contact our Property Tax team.