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News || lilliputianfinancialservices.com.au

Don’t forget depreciation

While reviewing a new client’s prior year tax returns last night, I noticed that there was no depreciation claimed on a rental property. We are now able to revise returns for four years and claim over $24,000 in tax deductions.

Client with rental properties, whether commercial or residential, should be claiming depreciation deductions. Depreciation deductions are valuable because they do not involve an outlay of cash.

There are two aspects to depreciation: depreciating the contents of the building plus writing off the cost of the building itself. Importantly, the property owner doesn’t have to be the one who built the building. It is possible to obtain a depreciation report from a quantity surveyor who will estimate the construction cost of the building and set out the depreciation claim for each year. The building write-off provisions apply to buildings built from the 80s onwards. They also apply to renovations.

Please contact our office if you have a rental property without a depreciation report. We can arrange for an ATO-compliant depreciation report to be prepared by quantity surveyor who charges $699. The fee is also tax-deductible.

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