We’re a good way into the New Year now, with Christmas hovering behind like a distant memory.
Around now, most investors will have laid out a plan for what they expect to see from 2017, as well as how they think they’ll react to these situations arising.
One of the top points on any investor’s list is whether or not they can stretch their budget and portfolio to take in another property in order to boost their cash flow. A key element that many don’t consider, however, is that they can actually claim deductions via depreciation which can save them a good deal of money.
A shocking 80% of property investors in Australia still aren’t making the most of the deductions they can claim via depreciation. To help you make your decision, take a look at these 4 reasons why claiming depreciations is a great idea.
1) The average first-year claim is $5,000-$10,000
Property depreciation is a deduction that you can claim as a result of your property, including the items within it, growing old and wearing out over time.
On average, property investors are able to claim between $5,000 and $10,000 – and that’s just in their first financial year.
By claiming property depreciation, you’ll also be reducing your taxable income, meaning you could also benefit in receiving more in your annual tax return.
2) All investors can benefit, regardless of property type or age
Some investors are under the belief that they can’t claim depreciation on their property because it’s too old. This, however, isn’t the case, as old properties as well as new attract sizeable deductions for their owners.
All types of properties merit depreciation deductions too, from hotels to residential to industrial units.
3) Adjust your tax returns for the past 2 years
If you haven’t already been making the most of property depreciation, you can adjust your tax returns for the past 2 years to reflect the new deductions.
4) The deduction fee is also tax deductible
Although you’ll have to pay a fee to arrange a deduction schedule, it’s completely tax deductible too.
Any investors who sort out their schedule prior to 30th June each year are able to claim back the fee in the same year, while investors who arrange a schedule after the 30th June are able to claim it back in the following year. This is a strong argument for why investors should get their depreciation schedule arranged within the same financial year as opposed to waiting until it’s time to pay tax.
The information and links provided on this website are for general information only and should not be taken as constituting professional advice. This information does not take into account the financial situation or particular needs of individual readers. Before making any decisions about matters discussed on this website, you should consider whether it is suitable for you in light of your own circumstances, and seek appropriate advice.