WHAT IS TAX DEPRECIATION?
To explain simply, depreciation is a tax deduction available to property investors. Your investment property earns income (through rent from tenants for example), which means there are various tax deductions available to you. These deductions are usually things you have spent money on such as council rates. You can claim depreciation from the day you settle your property and claim tax deductions for wear and tear on your investment property for up to 40 years. These tax deductions reduce your taxable income which reduces your tax and puts more money in your pocket. For example, if you earn $100,000 and claim $10,000 worth of tax depreciation you only pay tax on $90,000.
WHY DO I NEED A TAX DEPRECIATION SCHEDULE?
To declare depreciation, the Australian Taxation Office requires you to engage a qualified and registered Quantity Surveyor/Registered Tax Agent to prepare a depreciation schedule for your investment property. At GRC, we provide detailed, tailored reports around your specific needs so that you will receive the very best tax deduction available to you.
HOW MUCH WILL IT COST?
In most cases, depending on the location of your property, a detailed tax depreciation and capital allowance report will cost between $450 – $650. This depreciation schedule is 100% tax deductible, which means the cost of this report can also be offset against your taxable income. Remember, this small upfront investment can save you thousands of dollars for each year that you own your investment property.
HOW DO I GET STARTED?
Simply contact GRC Tax Depreciation Manager, Matthew Brown, or Senior Quantity Surveyor, Edward de Wet. They will ask you to complete a secure online form with information about your property such as location, settlement date and settlement cost. Alternatively, we can work with your accountant to get the process started. Once your investment property has settled, and all your investment property details have been provided, it will take between 2-3 weeks to inspect your property, complete the depreciation schedules and issue them to you. Then all you need to do is hand over this report to your accountant at tax time.
KEY THINGS TO KNOW
• Your accountant, real estate agent or property valuer are not qualified to prepare your depreciation report. Only a registered tax agent can legally prepare tax depreciation reports, which is a good thing for investors.
• You can claim depreciation on new and old properties of all types including residential and commercial properties in Australia and overseas. Every property is unique so it pays to get expert advice.
• Don’t risk a tax audit; calculating construction costs and property depreciation is a highly technical process with a number of legal implications which may trigger a tax audit if not prepared properly.
A Brisbane-based practice, GRC has been delivering detailed tax depreciation and capital allowance schedules for 30 years. Importantly, our people are qualified quantity surveyors and tax agents who are experts at getting the best return for our clients.
To get started, contact our Tax Depreciation Manager, Matthew Brown, or Senior Quantity Surveyor, Edward de Wet, on telephone + 61 7 3878 6222 or email firstname.lastname@example.org.