Property investors looking to claim the highest possible deductions this tax time won’t want to miss out on claiming depreciation.

What’s that I hear you say – isn’t 30 June the cut-off date for claiming tax breaks against your investment property? The truth is that if you’re claiming deductions for the 2021/22 tax year, then the expenses must predate 30 June 2022.

You have up to 15 May to organise from your depreciation claims from the 2021/22 tax year if your accountant is lodging the return for you. 

What is depreciation? 

Depreciation is the gradual reduction in the value of an asset, such as an investment property, over time due to wear and tear. The ATO allows property investors to claim this loss of value as a tax deduction.

However, to make these claims, you’ll need a depreciation schedule. Our partner BMT Tax Depreciation says depreciation is the second biggest tax deduction for property investors after interest, and claiming this break can significantly improve cash flow.

On average, BMT finds residential property investors almost $10,000 in first full financial year deductions alone.

What is a depreciation schedule?

A depreciation schedule is a detailed report outlining the items and fixtures which are legitimate tax deductions.

You can claim wear and tear to the building structure, fixtures, and fittings – but you’ll need a depreciation schedule to make these claims.

A depreciation schedule has several benefits, including identifying all eligible deductions for the current financial year and up to 40 years into the future. This information can help property owners lower their taxable income, resulting in significant tax savings.

Moreover, claiming depreciation can result in significant cash flow benefits for landlords. Additional tax savings from depreciation deductions may mean more money to reinvest or cover expenses.

Your accountant can answer all your questions about maximising the ongoing tax benefits of owning a quality, well-located investment property.

Where do you get it?

Quantity surveyors or specialist companies such as BMT produce depreciation schedules, which are 100% tax deductible. BMT, for example, has completed more than 800,000 property depreciation schedules, helping Australian taxpayers just like you save thousands of dollars every year.

So, with 15 May fast approaching and if you don’t have a tax depreciation schedule, BMT is here to help and continues to prepare schedules Australia-wide.

Organise a BMT Tax Depreciation Schedule today by calling 1300 728 726.