Depreciation Schedule For Rental Property
You’ve invested in a rental property, and you want to make the most of your investment.
But as a savvy investor, you know that your building and the items within it will deteriorate over time. The good news is that this loss of value is known as depreciation, and it can provide a significant tax benefit.
The ATO allows this depreciation expense to count as an expense against income from the rental property itself, which can result in tax savings and increased cash flow.
In order to claim depreciation deductions on your property and assets, you need to have an official understanding of their current valuation. This is done via a depreciation schedule.
Also known as rental property depreciation report, quantity surveyors report, or capital allowance and tax depreciation schedule, a tax depreciation schedule is an essential document to file your tax return and claim all of the expenses properly.
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Reasons For A Rental Property Depreciation Schedule
As a property gets older, the building’s structure and the assets within it wear out – they depreciate. The Australian Taxation Office (ATO) allows owners of residential rental properties to claim this depreciation as a tax deduction. You can claim depreciation under two categories.
The structure, or premises, of your rental investment, refers to the construction of the building itself. These are depreciated over 40 years for particular renovations, which is the presumed useful life of the building.
But the ATO also allows an annual depreciation amount on the “plant” of your investment property. This includes items that are individually identifiable, not part of the building structure, that are not permanent, and will likely have to be replaced.
These depreciating assets are expected to decline in value over time and will eventually wear out. If they cost more than $300, you can deduct that lost value from your taxes.
Some examples of depreciating assets are appliances (washing machine, refrigerator, dryer, dishwasher, etc.), carpets or floating timber flooring, furniture, etc.
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Obtaining A Depreciation Schedule
As you might imagine, determining the value of all plant and premises items is complex and challenging. In fact, the ATO only allows a limited number of people to work in this area.
Persons who are trained and registered to do this work are known as quantity surveyors. They do a thorough inspection of your rental property to determine the cost of all plant and premises items, as well as the age and condition of those items. They then use this information to create a detailed report that will be your foundation for claiming depreciation tax deductions each year.
It is important to remember that you must have a tax depreciation schedule on file with the ATO in order to claim these tax breaks. Also, you must maintain this depreciation schedule on an ongoing basis to allow for any changes in the value of your property.
The good news is that you can use a single depreciation schedule for the life of your rental property. There is no need to hire a quantity surveyor on an annual basis.
Of course, there are times when you may want to get a new survey. For instance, if you do capital works – renovate your property or put on an addition – you would like the services of a quantity surveyor to obtain a new report.
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Depreciation Tables
Our quantity surveyor will create a document that individually itemises your assets when you choose us for your depreciation table creation. They will also look at any capital works and forecast your deductions over a forty-year period.
Your report will have both prime-cost and diminishing value in written and graphic form so that you and your accountant can compare them easily. That way, you can choose the depreciation method that is most beneficial to your personal situation.
The quantity surveyor will also identify assets that can be either immediately written off or pooled together to speed up depreciation claims.
Our quantity surveyors are all registered tax agents with the ATO, so you can trust that their work will be of the highest quality. Moreover, the ATO will accept their valuation without question, so you need not worry if you are ever audited.
We only hire tax specialist quantity surveyors with substantial experience in the field. This means you can be assured that our staff is qualified and dedicated to obtaining the best possible outcomes for your situation.
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Why Choose Us?
Tax depreciation schedules are an essential part of any rental property investor’s tax return, but property investors are not always aware of the deductions they can claim on their rental properties.
The tax office doesn’t make it easy, and many investors are so busy with running their businesses and lives that they don’t have time to figure out depreciation schedules. But there is a better way.
When it comes to tax deductions for rental properties, we are one of Australia’s leading experts with over 20 years of experience helping thousands of investors maximise their tax returns through accurate depreciation schedules and reports that show how much they can offset against their taxable income.
Whether you own one investment property or several, we will provide you with accurate depreciation schedules that cover everything from plant & equipment items, such as carpeting and air conditioning units, to the structure itself.
If you want your investment properties to produce more cash flow each year, then having your very own accurate depreciation schedule will help you get there faster.
We will help you save money by maximising your claims with our free, over-the-phone estimates and fast turnaround times. Get started today with Australia’s leading professional quantity surveyors for rental property investors.