80% of landlords losing out at tax time

Adam Smith 18 April 2016

80percent of landlords losing out

Are you losing thousands at tax time on your investment property? A new report claims the majority of landlords are.

The head of a major real estate franchise has claimed four in five landlords are losing thousands of dollars in taxes through outdated depreciation schedules. Raine & Horne executive chairman Angus Raine has said property investors need to pay close attention to the depreciation schedule they have in place as the financial year draws toward a close.

“The problem is that many landlords either aren’t aware of the benefits associated with depreciation, or don’t have an up-to-date depreciation schedule, which enables them to claim against the reduction in value of items such as carpets, curtains, stove cook tops, some light fixtures, shower heads and so on,” Raine said.

Raine said landlords could claim between 10% and 40% off a variety of depreciable items each tax year.

“In many cases, 2.5% of the building cost of the investment home is also claimable on an annual basis,” he said.

Brad Beer of quantity surveying firm BMT Tax Depreciation Quantity Surveyors said property investors who purchased new homes could see even greater benefits.

“One important benefit that new homes offer investors is considerable capital depreciation. Almost 100% of the construction cost is tax-deductible over the life of the property,” he said. “As a rule, the newer the property, the more an investor can claim, making purchasing a near-new house or apartment potentially more worthwhile, in a taxation sense, than an established home, at least for the first five or so years of ownership.”

Raine urged property investors to seek out professional advice in creating or updating a depreciation report. He said this could be particularly useful for established properties, where missed depreciation claims could be back-dated by two years.

Depreciation tips

BMT Tax Depreciation chief executive Brad Beer offers his tips on how property investors can maximise their depreciation.

Read it here

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