Tax Depreciation Brisbane

Buildings age and deteriorate over the course of time. The Australian Taxation Office (ATO) allows you to deduct depreciation from your taxes if you own an investment property that provides income.

Call us Today

Depreciation Packages

Depreciation Package
PLUS

$550

plus GST

Quantity Surveyor Full Depreciation Reports
40 Year Depreciation Report
Prime Cost vs Diminishing Value
Low Cost & Value Pooling
Director Sign Off
Photos of Property
Property Research/Analysis
RP Data
Emailed to you or your Accountant
ATO Compliant

On average, clients receive a return of 10 X their fee
We can estimate your tax return over the phone

Depreciation Package
STANDARD

$495

plus GST

Quantity Surveyor Full Depreciation Report
40 Year Depreciation Report
Prime Cost vs Diminishing Value
Low Cost & Value Pooling
Director Sign Off
Property Research/Analysis
Emailed to you or your Accountant
ATO Compliant

On average, clients receive a return of 10 X their fee
We can estimate your tax return over the phone

How to Save Money at Each Tax Filing

With a single property depreciation schedule, you can apply for tax savings in each financial year.

With a once-off investment into creating a tax depreciation schedule, your accountant will be able to submit a depreciation claim using this document for years or even decades to come.

The purpose of tax depreciation reports is to lower your taxable income. By doing this, it lowers the overall amount of tax you must pay each financial year.

When everything is considered, a tax depreciation schedule is a strategic investment to maximise the earnings from an investment property.

The Value of Making a Claim on Depreciation

The tax benefits available to real estate investors are numerous. Unfortunately, many people don’t fully utilise the depreciation deductions that are available to them.

Property owners frequently overlook depreciation in favour of other tax deductions, for costs such as loan interest, maintenance and repair costs, property management fees, and council rates.

However, you can increase the profits from your investment properties by maximising your tax deductions, which means making a claim for depreciation.

If you are unaware of what you are eligible for, you may be missing out on thousands of tax savings.

Assets You Can Claim Depreciation On

Tax depreciation can be claimed on a lot more than just the construction costs of a building. According to the kind of asset in question, depreciation deductions can be divided into two categories:

Depreciation on capital works or Division 43
Depreciation of plant and equipment or Division 40

Division 43 Assets

The capital works allowance covers the claims for the actual structural parts of the property. This means any fixed components of the building are also included. The roof, walls, doors, kitchen cabinets and bathtubs, sinks and tiling are all regarded as capital works.

Because these components tend to be worth more, Division 43 deductions often account for at least 85 to 90 per cent of the total claimable amount.

How to Calculate Tax Depreciation for Division 43

Division 43 assets calculate tax depreciation at a constant rate of 2.5 per cent per year. Therefore, this method of calculating tax depreciation evenly distributes the tax savings – across a total length of 40 years.

In general, if the construction of a residential building started after September 15th, 1987, the owner is eligible for capital works deductions.

However, there are a few significant exceptions that cannot be subtracted. One is soft landscaping, or the landscaping of plants. Another exemption is construction costs that took place before September 15th, 1987.

In the case of older structures that predate this cut-off date, neither the original structure nor any remodelling carried out can be taken into account.

Division 40 Assets

Unlike the fixed structural objects, any readily removable fixtures and fittings inside the property come under a different category, called plant and equipment.

The ATO recognises more than 6,000 different types of plant and equipment that are eligible for tax depreciation claims. These include items as diverse as air conditioners, ceiling fans, hot water systems, carpets, blinds and smoke detectors.

Each item has a tax depreciation rate and effective life that have to be calculated independently by quantity surveyors.

How to Calculate Tax Depreciation for Division 40

There are two ways for quantity surveyors to calculate tax depreciation for Division 40 items. A property investor must choose between the diminishing value or the prime cost method.

Both methods use up the whole depreciation value available for each item, but they do so using a different formula.

The diminishing value method uses the opening balance of the new financial year to determine the deduction. The formula for this approach is depreciating the opening balance every financial year at 5%.

The prime cost approach is the alternative way to calculate tax depreciation. In this case, the annual depreciation is computed as a percentage of the cost.

This is straight-line depreciation, or in other words, the amount of deduction being claimed annually is the same, year on year. The calculation used by quantity surveyors would be as follows: the asset’s cost divided by its useful life (in years).

The Properties that Are Eligible for Tax Depreciation

Depreciation tax deductions are not available to just any real estate investor.

A property investor who purchased a completely new residential property, a residential property that has undergone extensive renovations, a rental property to which they have added new plant and equipment assets, or a commercial property is eligible to apply for a tax depreciation deduction.

If you are eligible to make a claim for tax depreciation, you stand a chance to greatly increase your cash flow from your investment property. In fact, the typical first-year claim for residential property owners might be over $9,000.

Get started today with a tax depreciation package from the quantity surveyors at JC Depreciation.

What Does Property Tax Depreciation Mean for Me?

Choose between two Depreciation Packages, the Standard package at $495 plus GST or the Plus package at $550 plus GST, with the team at JC Depreciation.

The purchase price of the tax depreciation schedule is eligible for a tax deduction, because it is an operating expense for your investment property.

Tax depreciation reports are an up-front expense that is both a necessity for managing your investment property as well as a savvy cost-saving measure.

The tax depreciation schedules from quantity surveyors have a potential lifespan of up to 40 years. This means your accountant can use the document to determine the depreciation deductions that will maximise your earnings, year after year.

In a single step, you could be benefiting from depreciation deductions for many years to come.

Reach out to our team in Brisbane, or learn more about our services for tax depreciation Sydney and tax depreciation Melbourne.