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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