Missed deductions add up
Closed circuit television systems, garden watering systems, intercom systems and solar powered generating system assets are all assets which are often missed by property investors when claiming depreciation.
These and other missed assets, such as door closers, freestanding bathroom accessories, garbage bins, shower curtains and smoke alarms are part of a list we have compiled to help investors avoid missed depreciation deductions.
Although many of these items have a low depreciable value, as shown in the following table, the depreciation deductions which can be claimed for these items can add up to thousands of dollars for an investor.
| Asset | Depreciable Value | Depreciation Deductions - Year |
| Ceiling fans | *$265 | $265 |
| Clocks - electrical | *$20 | $20 |
| Door closers | *$185 | $185 |
| Exhaust fans | *$125 | $125 |
| Freestanding bathroom acessories | *$110 | $110 |
| Garbage bins | *$250 | $250 |
| Garden sheds - freestanding | **$855 | $160 |
| Smoke alarms | *$145 | $145 |
| Closed circuit television system | $1,550 | $775 |
| Garbage disposal units | **$455 | $85 |
| Garden watering systems | **$558 | $105 |
| Intercom system | **$745 | $140 |
| Solar powered generating system assets | $5,500 | $550 |
| Spa bath pumps | **$425 | $80 |
| Window shutters - automatic | **$800 | $150 |
| Total | $11,988 | $3,145 |
The depreciation deductions within this table have been based on the diminishing value method of depreciation and are based on a first full financial year's claim. *Assets which have a depreciable value of $300 or less can be written off as an immediate write-off in the first full financial years claim. **These assets which have a value of $1,000 or less can be added to a low-value pool and depreciated at a arate of 18.75% in the first year.
Celing fans to smoke alarms are common assets often missed.
Closed circuit television system to window shutters - automatic are more obscure assets rearely claimed.
So here’s our system to help investors ensure no item is missed and to maximise their depreciation deductions:
- Take note of the assets included in the above table.
- If you have a depreciation schedule and you own any of these assets, confirm with your accountant that they are included in your schedule and your depreciation claim. If items have been missed, the Australian Taxation Office will allow you to go back and amend the previous two years of missed deductions.
- If you don’t have a depreciation schedule you should talk to a specialist Quantity Surveyor as soon as possible.
- Ensure your specialist Quantity Surveyor can outline the deductions available for assets which are eligible* to be written off immediately or added to the low-value pool.
*Under proposed changes outlined in draft legislation (section 2 of Treasury Laws Amendment Bill 2017), investors who exchange contracts on a second hand residential property after 7:30pm on 9th May 2017 will no longer be able to claim depreciation on plant and equipment assets. Investors who purchased prior to this date and those who purchase a brand new property will still be able to claim depreciation as they were previously. BMT Tax Depreciation will be making an official submission outlining our concerns along with suggestions of alternative methods to better resolve the Government’s integrity issue. To learn more visit www.bmtqs.com.au/budget-2017.
A specialist Quantity Surveyor will use their expert knowledge of tax legislation to ensure the maximum deductions are claimed for each individual asset.
Article provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation.
Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia-wide service.
Last updated: 12th December 2017