Running Property’s introduction to claiming depreciation on your investment property

As a property investor, there’s nothing more exciting than buying your first investment property and getting your first statement from your property manager showing your rent coming in.

But did you know that, even though rental income is the main priority for property investors, there are more ways to help you pay off your investment? One of those is by getting a property depreciation schedule completed prior to tax time, so that you’re entitled to make a claim.

Every year, thousands of dollars go unclaimed by property investors who are unaware of the benefits of a depreciation schedule. So don’t make the same mistake with your rental property! All it takes is a qualified quantity surveyor to inspect your home and prepare a report for your accountant. You could find the savings are a major assistance to your budget.

What is Property Depreciation?

There are two types of allowances available, both of which can potentially be offset against your assessable income:

Depreciation on Plant and Equipment, which applies to items within your rental property such as ovens, dishwashers, carpet and blinds etc.

Depreciation on Building Allowance, which refers to the construction costs of your rental property itself, such as concrete and brickwork.

If your rental property was built after 1985 you will qualify for both of these types of deductions; but if your property was built prior to this date you are limited to claiming only Plant and Equipment depreciation. Although older properties have more limitations, there are still significant savings available to you.

So how does a depreciation schedule help me?

Put simply, a depreciation schedule helps you pay less tax. The amount the depreciation schedule says you can claim effectively reduces your taxable income – potentially saving you thousands of dollars.

How do I get a Depreciation Schedule for my property?

To create a depreciation schedule, you will need to arrange for a site inspection from a qualified Quantity Surveyor. They will visit your property to measure, photograph and document all qualifying items.

The best time to get a Quantity Surveyor to inspect your rental property is immediately after settlement, and hopefully just before the tenant has moved in.

It’s very common for Quantity Surveyors to liaise directly with the tenant or property manager in order to cause minimal disruption to the tenant.

How much will my property depreciation schedule cost?

The cost of preparing a tax depreciation schedule varies according to the type of property you’ve purchased, location, size and numerous other factors. Quantity Surveyors’ fees are 100 per cent tax deductible.

Our recommended Quantity Surveyors

BMT Quantity Surveyors are the largest and most successful tax depreciation company in Australia. Running Property are happy to recommend BMT to complete the tax depreciation schedule for your investment property.

Need help with setting up a Depreciation Schedule for your property?

The experienced Running Property team can help answer your questions about property depreciation schedules. We can even arrange all this on your behalf. To find out more, email anthony@runningproperty.com.au or call Running Property on 07 3392 1544 today.