Tuesday 20 August 2013

Tax Deduction Benefits Rewarded To Rental Properties


While calculating the taxes to be paid for the rental property, most property owners forget that they are also eligible for certain deductions for depreciation on rental property. In fact this is caused due to unawareness about the available legal tax deductions that every property investor can take advantage of. Actually, this is a little known fact that investment or rental properties are rewarded with many tax benefits in the form of property depreciation.

Depreciation on investment property is basically a tax deduction. It allows the tax payers or rental property owners to recover the cost of a property placed on rent. These tax deductions have to be calculated for both tax and purposes. Property tax depreciation is based on a set of rules defined by the Australian Taxation Office (ATO).



Basically, there are three main components of a depreciation schedule.

  • Capital Works Depreciation: Capital Works Depreciation for investment property is based on the original construction cost of the building.
  • Depreciation on Plant & Equipment: The property Depreciation on Plant & Equipment is calculated for items such as blinds, carpet, ovens and many more household items can be depreciated.
  • Renovations and Improvements: This part of the depreciation on investment property is for Renovations and Improvements that is applicable for capital improvements done to the property.

Actually, the ATO has authorized only educated and experienced quantity surveyors to prepare a tax depreciation schedule/report for investment or rental properties in Australia. Hence, if you are looking for a quantity surveyor in Australia to prepare a tax depreciation report for you, Property Returns is one of the best options!!!

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