Tax Deductions For Your Investment Property

With tax time just around the corner, its important for property investors to claim all the relevant deductions available to them. Most commonly, depreciation is the deduction that is missed because it is a non-cash deduction.

The ATO allows property investors to claim a deduction back at tax time to compensate for an investment property ageing and therefore depreciating in value. Research indicates that a high percentage of property investors don’t claim depreciation, not realising that they can. Every owner of an investment property, whether it be new or old, residential or commercial should be claiming their maximum depreciation entitlements.

Again, the key for investors is to obtain professional advice. There are Quantity Surveyors that specialise in preparing Capital Allowance and Tax Depreciation Reports for investors, which outline deductions available each financial year for periods of up to 40 years. These reports essentially demonstrate how much your taxable income will be lowered each year by claiming depreciation. A report can also be prepared to easily recover missed depreciation benefits by amending tax returns previously lodged with the ATO.

Put simply, obtaining a property depreciation report from a specialist Quantity Surveyor is critical to ensure you are claiming all of the items you are entitled to, and also not claiming anything that you shouldn’t be.