Claimscanbecategorisedtwoways–capitalworksor plantandequipmentItisimportanttoknowthe differencetounlockallthebenefitsofowningan investmentproperty
CathieCrampton,LJHooker’sHeadofProperty ManagementAustraliaandNewZealand,said depreciationoftenfallsintoagreyareaforinvestorsA quantitysurveyororaspecialistinthisareacantake awaytheguessworkwithaproperassessmentand createataxdepreciationschedule
“Therearemorethan6,000differentdepreciating assets,classifiedunder‘plantandequipment’ recognisedbytheATO,sothereisaverygoodchance youcouldbemissingitems,”shesaid
“Theupsideiswhenaddedtogether,depreciationcan reducetaxableincomeandtaxliability,whichcan improvecashflowandbeputtowardsgrowingyour propertyportfolio”
Depreciatingassetsarenotpartofthestructureofthe property,canbeeasilyremovedandexpectedtobe replacedwithinarelativelyshortperiod Ittendstobeanythingwithamotorsuchasremote garagedoors,dishwashers,exhaustfans,hotwater systemsandovenrangehoodsOtheritemsinthis categoryincludelighting,carpets,ceilingfans,blinds andcurtains
TheATOhasdeterminedwhatisknownasthe‘effective life’ofdepreciatingassetsandhowmuchcanbe claimedForexample,carpetsareconsideredtohavea lifespanof10yearsSomeitemsfallunder‘own estimate’suchasair-conditioningassets,clocksand doorlocks
Ifanassetcostslessthan$300–suchasakettleora toaster–andwasusedtohelpleasetheproperty, thenitmaybeeligibleforanimmediatereduction
