Sunshine Coast Market Research
Sunshine Coast property investment uses tax depreciation
Property investment is big business and one that can very quickly go south if the property owner does not manage that investment as well as humanly possible. One way to do that is to be aware of the legitimate tax claims that can be made on the property. One that is often forgotten about by many is depreciation, as the structure and fixtures will deteriorate over time and potentially lessen the value of the building. As such, it is a wise idea to contact a reputable quantity surveyor on the Sunshine Coast and have them prepare a tax depreciation schedule that will ensure that you don’t miss anything that can be legally claimed.
The schedules for tax depreciation are usually broken into two separate components, which are as follows:
- Capital works allowance (Division 43) – The structural element of the building is what comes into play here. It should be noted, though, that not every property will be eligible for this particular tax depreciation. Eligibility usually comes down to the age of the building with the owner able to claim either 2.5% or 4% of the historical construction cost.
- Plant and equipment (Division 40) – While all irremovable assets are covered in the capital works allowance, those that are removable fall into this category. These tend to be pieces that will deteriorate at a faster rate than the building, with each piece looked at on an individual basis in order to determine how much can be claimed.
An investor will often ask how much they can reasonably expect to claim on each of their buildings, in regard to the life of the building but that is a question that is impossible to answer without the property being thoroughly inspected by a quantity surveyor. There are all kinds of different elements, such as age, building type, what it’s being used for, and more all coming into play. It also has to be decided whether the Diminishing Value or Prime Cost method of depreciation is used.
In order to fully maximize the tax depreciation claims that can be made, the owner of the property needs to take the time to find a quantity surveyor that has a high level of knowledge and experience in both construction costing and tax depreciation legislation. Our team at Asset Economics, tax depreciation specialists on the Sunshine Coast is ready to help you. As a property owner what can you reasonably expect from a qualified quantity surveyor? Here are a few things that should be included in the service:
- A complete inspection of the property, with all of the depreciable assets identified, recorded, and measured.
- Preparation of detailed records that comply with the needs of the Australian Taxation Office.
- A thorough examination of all documents associated with the property to determine which will help advance the claim.
- A fully completed tax depreciation schedule delivered within a week of the initial site inspection.
As you can see, it is a fairly complicated process that really should be handled by a quantity surveyor with experience and knowledge of the tax depreciation schedule. Asset Economics are one of the best quantity surveyors on the Sunshine Coast and are more than up to the task of preparing your tax depreciation schedule.
Matthew Stanely, managing director at Asset Economics