Making the most of tax depreciation on your investment property is more important than ever as finances tighten during the COVID-19 crisis.

Many investors don’t realise they are leaving thousands of dollars’ worth of deductions on the table when they potentially need it the most, according to Peter Foldes of Washington Brown Depreciation.

As we near the end of the financial year, Foldes says it’s essential property investors move now to obtain a tax depreciation schedule if they don’t already have one.

“Property tax depreciation is a legal deduction related to the wear and tear of an investment property over time,” says Foldes, guest speaker on a property market webinar hosted by Hotspotting founder Terry Ryder on 5 May.

“Claiming deprecation reduces your taxable income which means you pay less tax – and paying less tax, I would have thought, is more important than ever.”

He says many investors don’t know about the benefits of tax depreciation or don’t pursue it because they believe, wrongly, that it’s not worth the effort.

But, over the lifetime of a property, it could be worth tens of thousands of dollars.

“It does get overlooked – particularly now that we all have some rather large distractions,” he says.

“This is a shame because a lot of Australians are doing it tough in terms of income, and depreciation really can make a huge difference to an investor’s cash flow.

“It can be a significant boost to cash flow and not something you want to donate to the tax department unnecessarily.

“It is potentially more important during these times than ever.”

Foldes says all investors have to do is engage a quantity surveyor to prepare a tax depreciation schedule which generally costs a fraction of the potential benefits.

“A typical report (by Washington Brown) is anywhere from $660 including GST up to $770,” he says.

Some investors believe that if an investment property is not a new build it’s not worth getting a tax deprecation schedule – after legislation changes in 2017 which mean that depreciation on fixtures and fittings cannot be claimed on existing properties.

But Foldes says there are still plenty of potential deductions on existing properties in terms of the structural components.

Investors who are unsure should contact him and he will happily discuss the potential of their investment property before committing to a report.

“It costs nothing to ask,” he says.

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