Preparing Early for End of Financial Year with Depreciation Schedules
As property investors, we are always happy to stumble across ways to increase our tax return and consequently, our bottom line. So when there are simple techniques and actions you can take to ensure your investment is working its hardest for you – we want you to know about it.
This week it is depreciation schedules. For those seasoned investors, depreciation schedules are stock standard. But for those who are new to the property investment game, we have broken them down to the basics, to ensure you are armed with the best information regarding your investment property as we zoom towards EOFY.
WHAT IS A DEPRECIATION SCHEDULE AND DO I NEED ONE?
A depreciation schedule is a report by a qualified surveyor that determines the value left in your property, which is then handed to your accountant at tax time to reduce your taxable income.
There are two types of depreciation that can be claimed.
Plant and Equipment
Think of the equipment that is inside the property such as dishwashers, fridges, washing machines, carpets and blinds.
Think of everything it took to build the property including bricks, mortar, concrete, render etc.
Both the depreciation of the plant and equipment and the building can be assessed by a qualified surveyor and combined to reduce your taxable income. It is a commonly overlooked, yet such a simple task that can drastically increase your bottom line and fill your pockets come tax time.
The short answer if you need one? Yes.
WHEN SHOULD I GET A DEPRECIATION SCHEDULE DONE?
Whether your home is old, been renovated or is brand new, you are entitled to claim depreciation.
The best time to call in your property surveyor is right after settlement prior to accepting your first tenant. (Realestate.com.au) Your surveyor can assess your property. They will provide an up-to-date assessment on the value of both plant, equipment and building. These values will effectively collate your yearly depreciation schedule. Depreciation schedules can take up to three weeks to prepare. Book a surveyor now to ensure you are ready come tax time and beat the last minute rush.
ONE LAST NOTE
Depreciation schedules are 100% tax deductible. So every move you make is working for your bottom line. So get cracking and book your depreciation schedule today and get the most out of tax time.