Investment property owners often miss out on thousands of dollars in depreciation for renovations due to two main reasons:
- They don’t know what depreciation entitlements they can claim for renovations or refurbishments to their investment property
- They don’t use a qualified Quantity Surveyor to prepare a tax depreciation schedule
Follow the steps below to ensure your tax depreciation for renovations schedule is right the first time around.
Scrapping refers to the removal and disposal of any potentially depreciable asset from an investment property. When worn or old assets (like carpet and hot water systems) are replaced and scrapped, the owner of the property may be entitled to claim the remaining depreciable value for the items being removed as a tax deduction in that financial year.
Get a “before renovation” tax depreciation schedule
Arranging a tax depreciation schedule before completing renovations will save you time and money when making a claim. In case of an audit by the Australian Taxation Office (ATO), a valuation of all items in a property, as well as adequate photographic records is required.
Get an “after renovation” tax depreciation schedule
A second schedule is prepared after completion of the renovation, identifying the value of all new plant and equipment and capital expenditure within the property. The adjustments will be made to your tax depreciation schedule for a small adjustment fee and should not cost you as much as the initial tax depreciation schedule.The new schedule will outline all the depreciation claims available for the life of the property (forty years).
Only deal with a credible provider of tax depreciation schedules
With over sixteen years of Quantity Surveying expertise, BMT Tax Depreciation is the leader in providing ATO compliant and comprehensive tax depreciation schedules to property investors Australia-wide. At BMT, our qualified team of Quantity Surveyors meticulously prepare and customise each and every BMT Tax Depreciation Schedule, ensuring you claim everything you are entitled to.
Scrapping is a complicated process that requires the expertise of a specialist Quantity Surveyor in conjunction with an Accountant. By requesting a tax depreciation schedule you know you’re not going to miss out on anything and your Accountant will love you for it.
Looking to claim all of your rental property deductions and expenses at tax time but don’t know where to start? Want to pay less tax and get the most out of your tax return? Then you’ll find your answers in this simple rental property deduction checklist, which has been put together by one of Australia’s leading accountancy practices.