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Should you get a Depreciation Schedule for a property you have invested in or intend to rent out? The short answer is yes.

Recently, we have seen clients not aware of or not willing to pay for a Professional Tax Depreciation Schedule provided by a Quantity Surveyor, and whom provide a value and depreciation amount on all aspects of a property including the buildings, improvements, equipment and fixtures and fittings in compliance with ATO guidelines.

A Depreciation Schedule can save hundreds if not thousands in tax each year, yet some investors or owners do not invest the money which is normally around $700 and fully tax deductible for an ATO compliant depreciation report and schedule.

Depreciation is a deductible expense against rental or investment income from the property and helps reduce the tax paid by the owner or investor.

Sometimes, people think they are not earning enough income from the property or investment to justify the expense of a Tax Depreciation Schedule.

This certainly comes back to bite the owner/investor when they sell the property and there is a capital gain as once this is realised, it is also allocated against past losses and current income to provide a net taxable position. These past losses can and do include depreciation.

Even if you believe there is not enough income from the property now to pay a lot of tax, any losses can accumulate and be offset against future capital gain.

Please come and see us or call TaxAssist for a confidential discussion on your situation if you believe that you do not have a Tax Depreciation Schedule currently or you would like to discuss your situation with us. We can assist you to improve your taxable position and minimise tax legally.

Date published 12 Jul 2017

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.