I'm often asked by investors 'what is a depreciation schedule and why do I need one?' In short it's a resounding YES.
Considering that at least 90% of landlords do not have a deprecation schedule, which can be worth $1000's in taxation rebates, I'm at least pleased they ask the question.
When you invest in property, it helps build your wealth but there is also the benefit of legitimate tax deductions. Although I don't recommend buying an investment property just for the tax benefits, it is a bonus when you purchase.
A depreciation schedule is an accurate, claimable deduction document, fully approved by the Australian Taxation Office. Your accountant will use it when claiming your annual tax deductions against your investment property.
How do I get a depreciation schedule?
We highly recommend you engage the services of a qualified Quantity Surveyor. They will charge you anywhere from $500 - $800 for a report. They will complete a thorough report and identify what you can claim. The report can only be completed once the property has settled. If there have been any upgrades such as installing a split system, larger stove, solar panels and so on they will be added to the schedule.
This report is then given to your Accountant who will use this in your tax return. If in doubt, please ask your Accountant any specific questions in relation to a depreciation schedule as this is an excellent way of maximising the return on your investment property.
Note: the Quantity Surveyor's fee is tax deductible so don't forget to claim it at tax time.
We use MCG Quantity Surveyors who you can find at this link here.
Do yourself a favour and look into this money-making machine for your investment property - it would be crazy to miss out!
As always, if you have any questions, leave a comment below.
Until next time,
From the desk of Christine.