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Do you own an income producing property? For example a rental property, retail shopping centre or a commercial building? Did you know that the ATO allows you to claim deductions against your income producing property just as you would for a business vehicle?
Depreciation is an accounting term which describes the decline in value of an asset over time. A Tax Depreciation Schedule identifies the assets which are depreciable, assigns them a value, and puts them in a format used by Accountants to complete a tax return. These depreciable assets are written off against your taxable income.
Many Australian's do not realise the potential deductions they are missing out on by not claiming depreciation against their property. These deductions are in the form of Division 40 and Division 43 assets, where Division 40 assets could be classed as 'replaceable items' (ie/ ovens, air conditioners, fans, carpet) and Division 43 assets classed as 'fixed items' (ie/ the structure of the house, tiles, handrails, cabinets). The Depreciation Schedule will estimate values for these assets and depreciate them in accordance with the ATO's depreciation guidelines. LEAD Consultants is licenced to assess the depreciable items in your investment property and complete a Tax Depreciation Report (or Schedule), which is used by your accountant at tax time.
To illustrate the possible Tax Depreciation savings, LEAD Consultants has prepared the below 'real world examples' detailing Jim's potential depreciation claim. Read Jim's story below.
* Figures are estimates only based on a typical property and do not represent a particular person or property. These figures should not be relied upon for taxation purposes as they have been supplied as marketing examples only. LEAD Consultants will not carry any liability for the data above (expressed or implied, included or omitted). Independent legal, financial and taxation advice should be sought before relying on any of the above information.
Investment property owners can claim depreciation on the property. A depreciation schedule outlines the deductions of the property, which the owner's provide to their accountant at tax time.