Do you know about this tax deduction?
Lucrative tax benefits will provide a welcome financial boost for many investment property owners this tax time, according to tax accountant Bradley Beer.
Owners of income-producing properties can often claim sizable tax deductions for the wear and tear that occurs as a building gets older and items within it wear out. These deductions are known as property depreciation.
Mr Beer said that depreciation deductions have never been needed more in the lead up to the end of the financial year.
“Property investors should take up every opportunity to improve their tax return this year,” Mr Beer explained.
“Experienced investors know to use a specialist quantity surveyor to find every available depreciation deduction on their property.”
According to Mr Beer, a new house worth $730,000 would typically yield first full-financial year depreciation deductions of $15,519 and cumulative deductions of $69,523 over five years.
A second-hand unit worth $570,000 would yield first full-financial year depreciation deductions of $5874 and cumulative deductions of $24,670 over five years.
Mr Beer said many depreciable items aren’t obvious to the untrained eye and will go undetected if a depreciation specialist isn’t used.
“A property can hold significant hidden tax deductions that only an expert can find. For instance, you may be able to claim on renovations, even those completed by previous owners. This could result in thousands of additional dollars back at tax time.”
Do you own an investment property? Did you know about this tax deduction? Have you taken a financial hit due to the coronavirus?