Tax Depreciation: How to be a hero to your clients

Most property investors are unaware a Tax Depreciation can produce significant financial gains. In fact, all investors, business owners and landlords can utilise a depreciation schedule to maximise their tax return on a property investment if their property is eligible for a claim.

As a financial advisor, planner or accountant you can make sure your clients get the most out of their investment by helping them understand what a tax depreciation schedule is and how it can maximise their tax return on a property investment.

All owners of income-producing property should investigate whether their property qualifies. If the building improvements do not give rise to a claim, a claim for the fittings or plant items may be possible. In the case of commercial property, both landlords and tenants are eligible to make a claim.

At Opteon, a property specialist completes a comprehensive internal and external inspection of the property, ensuring all potential deductions are claimed.

A tax depreciation schedule can pass on significant financial gains to your clients, and they’ll love you for it!

Here are some of the key tax depreciation questions you might get from a client and how to answer them.

• How does tax depreciation work?

The Australian Tax Office (ATO) allows for the costs of construction and fit out of investment properties to be claimed back over time, against the income earned on a property. A tax depreciation schedule details the eligible amounts that can be claimed in a tax return over a 40 year period.

• What type of properties are eligible?

For all owners of income producing property, it is worthwhile to investigate whether your property qualifies. Our specialists inspect your property thoroughly so they will ensure you are maximising your claims. Contact us to see if your property is eligible.

• What actually happens when someone comes to inspect my property?

On your instructions, one of our property specialists will complete a comprehensive internal and external on-site inspection of the property. Our team then reviews the potential deductions, including original building and structural improvements, renovations, plant items and eligible common areas.

• I heard there was a change in legislation and you can’t make claims for residential property anymore, is this true?

In short, no. Investors who purchase a brand new residential property can continue to claim depreciation for structural improvements and plant and equipment. Depreciation of structural improvements and plant and equipment for non-residential (Commercial, Industrial, Agricultural) properties also remains unaffected.

However, owners can no longer claim on pre-existing plant and equipment improvements within properties which have been lived in as a primary place of residence (where the owner decides to rent the property post 1st of July 2017). Nevertheless, structural improvements can still be claimed. Commonly, the structural improvements form a majority of the claim, so a prepared schedule is still worthwhile. 

If you’d like more information on how we can help you help your clients, you can contact us for a free quote or with any questions, by emailing us depreciation@opteonsolutions.com or calling 1300 40 50 60. We can’t wait to help you!

Disclaimer: Opteon does not provide accounting, specialist tax or financial advice.