Investment property depreciation schedules are a great way for residential and commercial investment property owners to claim tax deductions each year. Whether your property is new or old, large or small, you can save thousands in deductions each financial year. But what exactly is a depreciation schedule and how can you order one? In this article, we’ll guide you through all that you need to know about investment property depreciation schedules including a brief introduction, the benefits, what it includes as well as how you can get your hands on one.
A residential or commercial depreciation schedule is a document produced by a qualified quantity surveyor to substantiate and list the depreciable assets in your property for tax deduction purposes. In order to produce a valid depreciation schedule, the QS must be fully certified and accredited by the ATO. For more info https://www.arrowheadhomebuyer.com/
The process of obtaining a quality residential or commercial depreciation schedule is quite straightforward. Once you have selected a qualified QS to prepare your depreciation schedule, the report can be ordered online or over the phone. The QS will undertake all the necessary research to ensure that your deductions are maximised. A thorough inspection of your property is also undertaken during which time the QS will assess the condition and inclusions in your property.
During this process, the QS will identify all eligible depreciable items in your property which include plant and equipment, capital works and furniture. Once this is completed, the QS will then calculate your cost basis which is used as a starting point for future depreciation claims. This value is determined by subtracting the land from your property’s purchase price and dividing it by the residential effective life of 27.5 years.
Once your cost basis has been calculated, the next step in the depreciation process is to itemise the deductions you are entitled to based on this information. This will provide your accountant with a comprehensive list of eligible depreciation expenses that can be claimed against your rental income for the year.
This allows you to maximise your cash flow and reduce the amount of tax you are required to pay. By taking advantage of the full range of tax benefits available to you, such as deductions for depreciation, interest, maintenance, operating costs and repairs, you can minimise your taxable income and increase your wealth.
There are many benefits to investing in property as an alternative to other forms of investment. Not only is it an easy way to build your wealth, but it also offers a stable income as you continue to rent out your property. It is important for new property investors to be aware of the deductions they are able to claim and how this can impact their bottom line.
Investment property depreciation is one of the best ways to maximise your tax return each year. A quality depreciation schedule can help you save thousands each year, allowing you to create a positive cash flow result for your property investments.