WHAT IS TAX DEPRECIATION?

WHAT IS TAX DEPRECIATION? from Capital Claims HOBART

By: Capital Claims HOBART   13-Apr-2016
Keywords: Property Investment, Investment Property, Quantity Surveyors

Tax Depreciation is the key to unlocking thousands of dollars in additional cash flow from your investment property.

Tax Depreciation (including Capital Allowances) is an accounting term used to describe the ageing, wear and tear of an income-producing asset - in your case, your investment property, and all of the assets contained within.
Tax Depreciation is a legitimate tax deduction, and is claimed in the same way you claim interest on your loan, repairs and maintenance, management fees etc.
The best thing is, Capital Allowance/Tax Depreciation is a calculated written value, which means you haven't had to spend any additional money during the year to claim it back. Simple!

HOW DOES CLAIMING CAPITAL ALLOWANCES AND TAX DEPRECIATION BENEFIT INVESTORS?
Capital Allowances and Tax Depreciation are expenses associated with owning your investment property.
As a property investor, you claim the expenses/deductions when doing your income tax return, and it has the effect of reducing your taxable income.
This means your tax payable for the financial year will be calculated on a lesser income.
Which means you will pay less tax. Awesome!

WHAT CAN I CLAIM TAX DEPRECIATION ON?
All assets you can claim Tax Depreciation on fall into one of two categories:
1. Division 43, claimed as Capital Allowances - this typically relates to the constructed or structural component of your property for e.g. bricks, tiles, cladding, frames and trusses, joinery, hard landscaping etc. Division 43 works are depreciated at rates of 2.5% or 4.0% per annum (depending on the buildings age and use).

2. Division 40, items eligible for Tax Depreciation - this component includes all of the assets within your property, for e.g. Hot water system, dishwasher, blinds/curtains, carpet, light shades etc. The best thing about division 43, or "plant and equipment", is that is can be claimed on any property - regardless of age! So even if your building was constructed more than 20 years ago, it is still eligible for depreciation claims. For the property investor, this means more tax deductions, less tax payable, and more cash back in your pocket!

Over the years we have helped thousands of property investors claim the maximum amount of property depreciation deductions available to them.
In many cases we have helped people who had been misinformed about depreciation, and had been told it wasn’t worthwhile, or that the cost of a depreciation schedule would outweigh the tax benefits associated.

We guarantee the value of our depreciation schedules.
Claim at least double our fee in the first full year or the depreciation schedule is free!

For more information visit our website: http://www.capitalclaims.com.au/
Or call our friendly experts on: 1300 922 220

Keywords: Depreciation Reports, Depreciation Schedule, Investment Property, Property Depreciation, Property Investment, Quantity Surveying, Quantity Surveyors, Tax Depreciation, Tax Depreciation Reports, Tax Depreciation Schedule

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