Sean Loftie-Eaton, ACT Director at Capital Claims, has prepared some fantastic insights into the importance of using depreciation to increase returns from investment properties. Sean stresses the importance of getting the depreciation schedule drawn up by a professional in the field.
“So many property investors still miss out on significant tax deductions each year as they are not using a quality depreciation schedule.”
Sean has summarised the issues down to six key points that are regularly misunderstood by investors:
- Depreciation is one of the largest deductions claimable – average deductions for residential properties range from $6,000 to $12,000 for the first year, and over $30,000 for the first 5 years;
- Old properties still generate great deductions – 90% of old (pre-1987) properties still qualify for depreciation due to renovations and asset replacements;
- Claim for other people’s work – costs of renovations and assets installed pre-purchase can be estimated and claimed by the current owner;
- Claim for your renovations including assets thrown out – claim immediate deductions for assets disposed of during renovations and property improvements, and then claim for the all the new stuff;
- Benefits outweigh impact on CGT (Capital Gains Tax)– inflation, opportunity cost, exemption of Division 40 assets and discounts all mitigate the full impact on CGT calculations;
- Budget and DIY reports cost thousands more – dodgy reports cost the investor thousands in missed and ineffectively managed deductions. The fee for a report is 100% tax deductible – buy quality.
If you’d like to more information about maximising the return on your investment property through depreciation, contact Sean Loftie-Eaton, Canberra Director at Capital Claims by emailing him on email@example.com or call direct on 0419 509 484.
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Jonathan Irwin – Director
Capital Defence Homes
0421 040 082